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来源类型Working Paper
规范类型报告
DOI10.3386/w15727
来源IDWorking Paper 15727
Liquidity, Institutional Quality and the Composition of International Equity Flows
Itay Goldstein; Assaf Razin; Hui Tong
发表日期2010-02-04
出版年2010
语种英语
摘要FDI investors control the management of the firms, whereas FPI investors delegate decisions to managers. Therefore, direct investors are more informed than portfolio investors about the prospects of projects. This information enables them to manage their projects more efficiently. However, if investors need to sell their investments before maturity because of liquidity shocks, the liquidation price they can get will be lower when buyers know that they have more information on investment projects. In this paper we examine the choice between Foreign Direct Investment and Foreign Portfolio Investment at the level of the source country. Based on the Goldstein and Razin model, we predict that (1) source countries with higher expectation of future liquidity problems export relatively more FPI than FDI, and (2) this effect strengthens as the source country's capital market transparency worsens. To test these hypotheses, we examine the variation of FPI relative to FDI for source countries from 1985 to 2004. Our key variable is the predicted severity of liquidity shock, as proxied by episodes of economy-wide sales of external assets. Consistent with our theory, we find that the predicted liquidity shock has a strong effect on the composition of foreign equity investment. Furthermore, greater capital market opacity in the source country strengthens the effect of the liquidity shock.
主题International Economics ; International Factor Mobility ; International Finance
URLhttps://www.nber.org/papers/w15727
来源智库National Bureau of Economic Research (United States)
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资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/573401
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GB/T 7714
Itay Goldstein,Assaf Razin,Hui Tong. Liquidity, Institutional Quality and the Composition of International Equity Flows. 2010.
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