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Sovereign wealth funds: toward a new state capitalism? (In French)

Author

Listed:
  • Bertrand BLANCHETON (GREThA UMR CNRS 5113)
  • Yves JEGOUREL (LAREFI)

Abstract

This article investigates the factors that motivated sovereign wealth funds (SWFs) in their massive investment operations in European or US company equity, especially banking institutions. Considered to be investors with considerable financial clout, albeit passive and long-term, SWFs have long been seen as a restoring force in financial markets able to soften the impact of the destabilizing speculative strategies practiced by certain institutional operators. Over 2007, their massive cash injections into the banking sectors of industrialised countries could even go as far as having us believe that these investors were acting as saviours of the system. The rise of SWFs could hence be seen, at that time, as a change in financial capitalism in which States would act both as investors and regulators. Nevertheless, a sharper analysis of strategies conducted by SWFs shows that some of them are opportunistic, comparable to the strategies implemented by private institutional investors.

Suggested Citation

  • Bertrand BLANCHETON (GREThA UMR CNRS 5113) & Yves JEGOUREL (LAREFI), 2009. "Sovereign wealth funds: toward a new state capitalism? (In French)," Cahiers du GREThA 2009-04, Groupe de Recherche en Economie Théorique et Appliquée.
  • Handle: RePEc:grt:wpegrt:2009-04
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    File URL: http://cahiersdugretha.u-bordeaux4.fr/2009/2009-04.pdf
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    References listed on IDEAS

    as
    1. Sushil Bikhchandani & Sunil Sharma, 2001. "Herd Behavior in Financial Markets," IMF Staff Papers, Palgrave Macmillan, vol. 47(3), pages 1-1.
    2. Shams Butt & Anil Shivdasani & Carsten Stendevad & Ann Wyman, 2008. "Sovereign Wealth Funds: A Growing Global Force in Corporate Finance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 20(1), pages 73-83.
    3. Diego García & Francesco Sangiorgi & Branko Urošević, 2007. "Overconfidence and Market Efficiency with Heterogeneous Agents," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(2), pages 313-336, February.
    4. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-479, June.
    5. Dumas, Bernard J & Kurshev, Alexander & Uppal, Raman, 2005. "What Can Rational Investors Do About Excessive Volatility and Sentiment Fluctuations?," CEPR Discussion Papers 5367, C.E.P.R. Discussion Papers.
    6. Kotter, Jason & Lel, Ugur, 2011. "Friends or foes? Target selection decisions of sovereign wealth funds and their consequences," Journal of Financial Economics, Elsevier, vol. 101(2), pages 360-381, August.
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    More about this item

    Keywords

    Sovereign wealth funds; regulation; investment; financial markets;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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