Threats to Foreign Equity Investments in International Capital Markets: Nationalism and Militarism

Emre Kuvvet ()
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Emre Kuvvet: Department of Finance, H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University, Fort Lauderdale-Davie, Florida 33314-7796, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2013, vol. 16, issue 03, 1-16

Abstract: Even though financial markets have become more integrated and international capital now moves more freely across borders, we argue that access to foreign equity investments still remains a political decision, and this policy decision is a function of the country's nationalistic and militaristic sentiments. We use military spending as a proxy for militarism and nationalism, and show that countries with high militaristic sentiments have lower foreign equity investments. We also look at bilateral equity flows and find that a pair of countries simultaneously having greater increases in militarism has lower bilateral equity investments.

Keywords: Foreign equity investments; nationalism; military spending; bilateral equity flows (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0219091513500185

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