Bilateral Portfolio Dynamics During The Global Financial Crisis

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. The authors show that the size of the initial bilateral holding, geographical distance, common language, the level of trade and common institutional linkages helps 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.

Provided by: Trinity College Dublin Topic: CXO Date Added: Aug 2011 Format: PDF

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