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Bilateral Portfolio Dynamics During the Global Financial Crisis

Author

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  • Vahagn Galstyan

    (Trinity College Dublin, IIIS)

  • Philip Lane

    (Trinity College Dublin, IIIS and CEPR)

Abstract

There has been considerable bilateral variation in the pattern of portfolio capital flows during the global financial crisis: for a given destination, investors from different countries adjusted their holdings to different degrees. We show that the size of the initial bilateral holding, geographical distance, common language, the level of trade and common institutional linkages help to explain the pattern of adjustment. These bilateral factors are more important for equities than for bonds and for investors from developing countries than for investors from advanced countries.

Suggested Citation

  • Vahagn Galstyan & Philip Lane, 2011. "Bilateral Portfolio Dynamics During the Global Financial Crisis," The Institute for International Integration Studies Discussion Paper Series iiisdp366, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp366
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    References listed on IDEAS

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    More about this item

    Keywords

    International capital flows; International portfolios; External adjustment;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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