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Investor Protection and International Investment Positions: An Empirical Analysis

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  • Teresa L. Cyrus
  • Talan B. İşcan
  • Sheena Starky

Abstract

Given the recent revival of interest in the institutional determinants of global capital flows, we investigate the relationship between investor protection and international investment positions, using data on 40 countries for the period 1970–98. We find that strong shareholder protection is an important predictor of gross foreign direct investment liabilities, while countries with strong creditor protection tend to have positive stocks of net foreign assets. We conclude that the global pattern of investor protection is a significant determinant of international investment positions.

Suggested Citation

  • Teresa L. Cyrus & Talan B. İşcan & Sheena Starky, 2006. "Investor Protection and International Investment Positions: An Empirical Analysis," International Finance, Wiley Blackwell, vol. 9(2), pages 197-221, August.
    • Handle: RePEc:bla:intfin:v:9:y:2006:i:2:p:197-221
    DOI: 10.1111/j.1468-2362.2006.00181.x
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    1. Hawkes, Denise Donna & Yerrabati, Sridevi, 2015. "Institutions and investment in South and East Asia & Pacific region: Evidence from meta-analysis," Economics Discussion Papers 2015-62, Kiel Institute for the World Economy (IfW Kiel).

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