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Portfolio preferences of foreign institutional investors Author info | Abstract | Publisher info | Download info | Related research | Statistics Reena Aggarwal
Leora Klapper
Peter D. Wysocki
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The authors examine the relationship between foreign investment and the attributes of emerging market countries and firms in which investment is made. Their findings indicate that countries with higher levels of economic development and floating exchange rate regimes tend to have greater ability to obtain foreign capital. After controlling for the country's level of economic development, they find that firms in countries with stronger shareholder rights and legal framework attract more foreign capital. The authors also find that foreign institutions allocate more of their assets to firms with better corporate governance after controlling for other country and firm attributes. The main firm-level measures of corporate governance are derived from accounting quality variables. Their results imply that steps can be taken both at the country and the firm level to create an environment conducive to foreign portfolio investment. The analysis is based on a unique dataset consisting of equity positions of U.S. mutual funds in emerging markets.
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Paper provided by The World Bank in its series Policy Research Working Paper Series with number
3101.
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Date of creation: 01 Jul 2003Date of revision:
Handle: RePEc:wbk:wbrwps:3101Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433 Email: Web page: http://www.worldbank.org/ More information through EDIRC
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Keywords: Payment Systems&Infrastructure ; Economic Theory&Research ; Labor Policies ; International Terrorism&Counterterrorism ; Financial Intermediation ; International Terrorism&Counterterrorism ; Economic Theory&Research ; Financial Intermediation ; Environmental Economics&Policies ; Banks&Banking Reform ; Other versions of this item:
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Aggarwal, Reena & Dahiya, Sandeep & Klapper, Leora, 2005.
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Policy Research Working Paper Series
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Torben Lütje & Lukas Menkhoff, 2007.
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Economics, Finance and Accounting Department Working Paper Series
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