International Investment Patterns

IMF Working Papers, July 1, 2004

Source details

The paper provides a systematic analysis of bilateral, source and host factors driving portfolio equity investment across countries, using newly-released data on international equity holdings at the end of 2001.
It develops a model that links bilateral equity holdings to bilateral trade in goods and services and finds that the data strongly support such a correlation.
Larger bilateral positions are also associated with proxies for informational proximity.
The paper documents that the scale of aggregate foreign equity asset and liability holdings is larger for richer countries and countries with more developed stock markets.

Uses newly-released data on international equity holdings at the end of 2001.
Develops a model linking bilateral equity holdings to bilateral trade in goods and services.
Empirical results: the data strongly support a correlation between bilateral equity holdings and bilateral trade in goods and services.
Larger bilateral positions correlate with proxies for informational proximity.

Aggregate foreign equity asset and liability holdings are larger for:
- richer countries
- countries with more developed stock markets
Publication metadata included on the page (for reference within the page content):
- By Philip R. Lane, Gian M Milesi-Ferretti
- July 1, 2004
- Pages: 45
- Volume: 2004
- Issue: 134
- Series: Working Paper No. 2004/134
- DOI: https://doi.org/10.5089/9781451855630.001
- Stock No: WPIEA1342004
- ISBN: 9781451855630
- ISSN: 1018-5941

Purpose: to analyze factors driving portfolio equity investment across countries at the bilateral level.
Scope: bilateral, source, and host factors; informational proximity; relationship with bilateral trade in goods and services; aggregate patterns by country wealth and stock market development.

Source: International Investment Patterns, IMF Working Paper No. 2004/134.