Transparency and International Investor Behavior

Author/Editor:

Shang-Jin Wei ; Gaston Gelos

Publication Date:

October 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Does country "transparency" affect international portfolio investment? We examine this and related questions using a unique micro dataset on international portfolio holdings. We employ various indices of government and corporate transparency, focusing on the availability and quality of information. We find that emerging market equity funds hold fewer assets in less transparent countries. Herding among funds is somewhat less prevalent in more transparent countries. During the Asian and Russian crises, emerging market funds withdrew more strongly from less transparent countries after controlling for other risk factors. However, funds tend to react less strongly to news from more opaque markets.

Series:

Working Paper No. 2002/174

Subject:

Accounting standards Asset allocation Asset and liability management Emerging and frontier financial markets Financial markets Market capitalization Public financial management (PFM) Stock markets

English

Publication Date:

October 1, 2002

ISBN/ISSN:

9781451858709/1018-5941

Stock No:

WPIEA1742002

Pages:

39

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