The Role of Country Concentration in the International Portfolio Investment Positions for the European Union Members

Iuliia Brushko and Yuko Hashimoto

No 2014/074, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the international portfolio flows of European Union. Our analysis includes three dimensions: (1) the level of countries portfolio investment concentration (those who invest evenly among counterparties versus those who invest more heavily in some counterparties); (2) the share of total portfolio investment assets invested at the destination; and (3) pre- and during the crisis periods. We find that portfolio investment positions respond differently to macroeconomic variables depending on the level of investment concentration and the share of invested assets. In particular, variables of health of the financial system become important determinants for portfolio investment during the crisis.

Keywords: WP; stock index; GDP; interest rate; stock index growth; International Portfolio; Portfolio Flows; Portfolio Concentration; portfolio investment; concentration index; investment position; GDP ratio; Stocks; Long term interest rates; Short term interest rates; Unemployment rate; Real effective exchange rates; Global (search for similar items in EconPapers)
Pages: 43
Date: 2014-05-01
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Citations: View citations in EconPapers (3)

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