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International Portfolio Inflows to GCC Markets: Are There Any General Patterns?

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Author Info

  • Balli Faruk

    (Massey University)

  • Louis Rosmy J

    (Vancouver Island University)

  • Osman Mohamed A

    (University of Dubai)

Abstract

In this paper, we document the main factors underlying foreign portfolio inflows to Gulf Corporation Council countries (hereafter GCC). We find that bilateral factors, in particular, export volumes from GCC (host) countries to source countries, play a truly significant role in determining the volume of cross border portfolio inflows to GCC markets. This connection becomes even stronger over time. Moreover, GCC members' stable fiscal position is practically one of the important determinants of the volume of portfolio inflows to GCC markets. We have also found that the extent of openness in capital account transactions and the income levels of source countries are additional factors that can help explain the volume of foreign portfolio inflows to GCC members. Last but not least there exists to some extent a "GCC bias;" a large share of the portfolio inflows to GCC markets comes from other GCC countries.

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File URL: http://www.degruyter.com/view/j/rmeef.2009.5.2/rmeef.2009.5.2.1156/rmeef.2009.5.2.1156.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Review of Middle East Economics and Finance.

Volume (Year): 5 (2009)
Issue (Month): 2 (September)
Pages: 45-65

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Handle: RePEc:bpj:rmeecf:v:5:y:2009:i:2:n:3

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Citations

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Cited by:
  1. Rosmy Jean Louis & Faruk Balli & Mohamed Osman, 2012. "On the choice of an anchor for the GCC currency: does the symmetry of shocks extend to both the oil and the non-oil sectors?," International Economics and Economic Policy, Springer, vol. 9(1), pages 83-110, March.
  2. Peeters, Marga, 2010. "The changing pattern in international trade and capital flows of the Gulf cooperation council countries in comparison with other oil-exporting countries," MPRA Paper 23539, University Library of Munich, Germany.
  3. Yohei Okawa & Eric van Wincoop, 2010. "Gravity in International Finance," Working Papers 072010, Hong Kong Institute for Monetary Research.
  4. Marga Peeters, 2010. "The changing pattern of international trade and capital flows of the GCC countries," European Economy - Economic Papers 415, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  5. Faruk Balli & Rosmy Louis & Mohammad Osman, 2011. "The patterns of cross-border portfolio investments in the GCC region: do institutional quality and the number of expatriates play a role?," Journal of Economics and Finance, Springer, vol. 35(4), pages 434-455, October.
  6. Balli, Faruk & Basher, Syed Abul & Jean Louis, Rosmy, 2013. "Sectoral equity returns and portfolio diversification opportunities across the GCC region," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 25(C), pages 33-48.

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