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Are institutional investors an important source of portfolio investment in emerging markets?

Author

Listed:
  • Chuhan, Punam
  • DEC

Abstract

The author examines five major industrial countries'portfolio investment in developing countries to learn if institutional investors are significant investors in emerging developing countries. The data reveals considerable divergence in the pattern of outward portfolio flow for the industrial countries studied. Evidence on asset composition and discussion with market participants suggest that major institutional investors (such as pension funds and insurance companies) have tended to approach the markets for emerging developing countries cautiously. They invest only a tiny fraction of their portfolios in emerging market securities. The author finds that investor-country regulations governing outward portfolio investment were a significant constraint only in Germany.

Suggested Citation

  • Chuhan, Punam & DEC, 1994. "Are institutional investors an important source of portfolio investment in emerging markets?," Policy Research Working Paper Series 1243, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1243
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    References listed on IDEAS

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    1. Chuhan, Punam & Claessens, Stijn & Mamingi, Nlandu, 1998. "Equity and bond flows to Latin America and Asia: the role of global and country factors," Journal of Development Economics, Elsevier, vol. 55(2), pages 439-463, April.
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    5. repec:cdl:ucsbec:16-92 is not listed on IDEAS
    6. Gooptu, Sudarshan, 1993. "Portfolio investment flows to emerging markets," Policy Research Working Paper Series 1117, The World Bank.
    7. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1993. "Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," IMF Staff Papers, Palgrave Macmillan, vol. 40(1), pages 108-151, March.
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    3. Christoffersen, Peter & Chung, Hyunchul & Errunza, Vihang, 2006. "Size matters: The impact of financial liberalization on individual firms," Journal of International Money and Finance, Elsevier, vol. 25(8), pages 1296-1318, December.
    4. Cameron Morrill & Janet Morrill & Jean-Marc Suret, 1997. "Availability and Accuracy of Accounting and Financial Data in Emerging Markets: The Case of Malaysia," CIRANO Working Papers 97s-18, CIRANO.
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    6. Rishma Vedd & Paul Lazarony, 2014. "The Risk-Return Trade-Off Of Investing In Latin American Emerging Stock Markets," Accounting & Taxation, The Institute for Business and Finance Research, vol. 6(1), pages 93-104.
    7. Andreou, Christoforos K. & Lambertides, Neophytos & Savvides, Andreas, 2020. "Sovereign credit risk and global equity fund returns in emerging markets," Journal of International Money and Finance, Elsevier, vol. 107(C).
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