EconPapers    
Economics at your fingertips  
 

A Study on Global Investors’ Criteria for Investment in the Local Currency Bond Markets Using AHP Methods: The Case of the Republic of Korea

Jae Young Jang () and Min Jae Park ()
Additional contact information
Jae Young Jang: Seoul Business School, aSSIST, 46 Ewhayeodae 2-gil, Seodaemun-gu, Seoul 03767, Korea
Min Jae Park: Seoul Business School, aSSIST, 46 Ewhayeodae 2-gil, Seodaemun-gu, Seoul 03767, Korea

Risks, 2019, vol. 7, issue 4, 1-20

Abstract: Global investors’ investment in local currency bonds, especially Korea Treasury Bonds, has increased significantly since the mid-2000s, and their influence on bonds and financial markets has grown consistently. In this paper, we investigate global investor’s priority of decision factors in investing in Korea Treasury Bonds by distributing a pairwise comparative survey to experts and analyzing the results using the analytical hierarchy process technique. For analysis, we created model frames with experts in the field of investment based on literature analysis, selected survey participants by considering their institution of their employment, work experience and region, and obtained responses. We find that investors with short-term investment propensities are more sensitive to international and domestic factors and less to risk factors, and more heavily influenced by U.S. dollar funding conditions. On the other hand, investors with long-term investment tendencies are found to be more sensitive to international and risk factors as opposed to domestic factors, and influenced by: global policy rate decisions and fiscal soundness, sovereign credit rating, possible global economic recession, and geographical risks. Our findings not only contribute to enhancing investors’ understanding of the Korean bond market by discussing consensus among investors, but also provide policy implications for Korean government policymakers who need stable and sustained funding.

Keywords: local currency bond markets; Korea Treasury Bonds (KTBs); global investor’s consensus; investment decision; financing risk management; analytical hierarchy process (AHP) (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 M2 M4 K2 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.mdpi.com/2227-9091/7/4/101/pdf (application/pdf)
https://www.mdpi.com/2227-9091/7/4/101/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:7:y:2019:i:4:p:101-:d:272823

Access Statistics for this article

Risks is currently edited by Prof. Dr. J. David Cummins

More articles in Risks from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().

 
Page updated 2019-11-24
Handle: RePEc:gam:jrisks:v:7:y:2019:i:4:p:101-:d:272823