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International Investment Patterns

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  • Philip R. Lane
  • Gian-Maria Milesi-Ferretti

Abstract

The paper provides a systematic analysis of bilateral, source and host factors driving portfolio equity investment across countries, using newly-released data on international equity holdings at the end of 2001. It develops a model that links bilateral equity holdings to bilateral trade in goods and services and finds that the data strongly support such a correlation. Larger bilateral positions are also associated with proxies for informational proximity. It further documents that the scale of aggregate foreign equity asset and liability holdings is larger for richer countries and countries with more developed stock markets.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/134.

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Length: 45
Date of creation: 01 Jul 2004
Date of revision:
Handle: RePEc:imf:imfwpa:04/134

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Keywords: Foreign investment; Bilateral trade; stock market; equity investment; stock market capitalization; stock returns; foreign equity; capital controls; capital flows; financial market; portfolio investment; stock markets; financial markets; international finance; world stock market; capital market; equity shares; capital markets; capital inflows; capital movements; cost of capital; hedging; foreign stock; international capital markets; financial assets; asset markets; bond portfolios; risk aversion; external capital; financial sector; international capital; external equity; equity returns; stock market development; capital structure; domestic financial sector; capital market securities; equity capital; determinants of capital flows; domestic equity; commercial bank loans; financial regulation; bond; external ? equity; equity markets; international financial statistics; financial market development; stock market index; emerging market stock; securities laws; foreign portfolio investment; securities ? laws; financial instruments; equity market;

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References

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