- The Oxford Handbook of Sovereign Wealth Funds
- List of Figures
- List of Boxes
- List of Tables
- About the Contributors
- Introducing Sovereign Wealth Funds
- A Financial Force to be Reckoned With?: An Overview of Sovereign Wealth Funds
- Sovereign Development Funds: The Governance and Management of Strategic Investment Institutions
- From Financialization to Vulture Developmentalism: South-North Strategic Sovereign Wealth Fund Investment and the Politics of the “Quadruple Bottom Line”
- Sovereign Wealth Funds and the Resource Curse: Resource Funds and Governance in Resource-Rich Countries
- Sovereign Wealth Funds and the Global Political Economy of Trust and Legitimacy
- Sovereign Wealth Funds and Domestic Political Risk
- Sovereign Wealth Funds and Foreign Policy
- Sovereign Wealth and the Extraterritorial Manipulation of Corporate Conduct: A Multifaceted Paradigm in Transnational Law
- Sovereign Wealth Funds and Private Equity
- Co-Investments of Sovereign Wealth Funds in Private Equity
- The Use of Debt by Sovereign Wealth Funds
- Sovereign Wealth Fund Investment and Firm Volatility
- Sovereign Wealth Funds: Investment Choices and Implications Around the World
- The China Investment Corporation: From Inception to Sideline
- Investment Terms and Level of Control of China’s Sovereign Wealth Fund in its Portfolio Firms
- Strangers Are Not All Danger: Sovereign Wealth Fund Investment in the Energy Industry
- The Norwegian Government Pension Fund Global and the Implications of its Activities for Stakeholders
- Sovereign Wealth Fund Investments and Industry Performance: Evidence from Europe
- Spain and Sovereign Wealth Funds: Four Strategic Governance Types
- Sovereign Wealth Funds in Central and Eastern Europe
- Sovereign Wealth Funds in the Persian Gulf States
- The Australian Future Fund
- Is it Possible to Avoid the St Augustine Syndrome of Fiscal Procrastination?: The Case of Chile
Abstract and Keywords
In the past decade, sovereign wealth funds (SWFs) have been very active in western economies with massive liquidity injections and numerous stakes in various strategic areas. While a vast literature has documented their influence on firms’ behavior and equity valuation, their impact on the whole economy has been largely unexplored. This chapter investigates the aggregate impact of SWFs’ investments at the industrial level. Using a panel of ten European countries from 2006 to 2012, a relevant instrumental variables strategy is used to circumvent potential double causality between returns of the recipient countries’ stock market indices and SWFs’ investments. The results show a positive and significant impact of SWFs’ investments for five sectoral indices out of ten. Looking at conditional effects, it does not find that this relationship is affected by either the availability of alternative sources of financing in the economy—consistent with the liquidity argument—or different volatility regimes.
Keywords: sovereign wealth funds, industry-level analysis, stock market index, endogeneity, instrumental variable, government ownership, firm performance, industry performance, externality, cross-border investment
Sophie Béreau is Assistant Professor of Finance at the University of Namur, Faculty Member of CORE (Université Catholique de Louvain), and Consultant at the Banque de France. She holds a PhD in Economics from the Université Paris Ouest. Her research interests lie in international finance, asset pricing, and financial econometrics.
Jean-Yves Gnabo is Professor of Finance at the University of Namur. He has been Visiting Professor at the University of Orléans and worked as a consultant at the OECD. His main research interests lie in sovereign wealth funds as well as in financial econometrics, financial networks, and international finance in general. He has published in academic journals including Journal of Financial and Quantitative Analysis, Journal of International Money and Finance and Journal of Banking and Finance.
Malik Kerkour holds a PhD in Economics and Management from the University of Namur and is currently Postdoctoral Researcher in Econometrics at the University of Orléans LEO–CNRS (France). His areas of interest concern asset allocation, international finance, corporate finance, and financial econometrics. More particularly, his research has dealt with international investments, institutional investors, including sovereign wealth funds, corporate governance, network theory, and spatial econometrics.
Hélène Raymond is Professor of Economics at the University of Paris Nanterre. Her research interests cover sovereign wealths funds—on which she has published several papers and book chapters—and, more generally, international finance, crisis contagion, and financial anomalies.
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