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Does foreign portfolio investment reach small listed firms ?

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  • Knill, April M.

Abstract

Using a unique dataset, the author examines the impact of foreign portfolio investment on the capital issuance behavior of small listed firms. The author finds that foreign portfolio investment is associated with an increased probability of small firm security issuance in all nations, regardless of property rights development. Evidence suggests the mechanism by which this occurs is a freeing up of capital in domestic markets when large firms utilize the foreign investment directly. Debt levels in nations where property rights are more developed increase, suggesting that foreign portfolio investment may reach small firms through the banking channel as well as capital markets in these nations.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3796.

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Date of creation: 01 Aug 2008
Date of revision:
Handle: RePEc:wbk:wbrwps:3796

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Keywords: Debt Markets; Access to Finance; Economic Theory&Research; Emerging Markets; Investment and Investment Climate;

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References

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Cited by:
  1. Knill, April M., 2005. "Taking the bad with the good : volatility of foreign portfolio investment and financial constraints of small firms," Policy Research Working Paper Series 3797, The World Bank.

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