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Transparency and International Investor Behavior

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  • R. Gaston Gelos
  • Shang-Jin Wei

Abstract

Does country transparency affect international portfolio investment? We examine this and related questions using some new measures of transparency and a unique micro dataset on international portfolio holdings. We distinguish between government and corporate transparency. There is clear evidence that international funds invest systematically less in less transparent countries. On the other hand, herding among funds tends to be more prevalent in less transparent countries. There is also some evidence that during crises, funds flee non-transparent countries by a greater amount.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9260.

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Date of creation: Oct 2002
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Handle: RePEc:nbr:nberwo:9260

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