Determinants of foreign and domestic investment bias in global bond markets: Some empirical evidence

Park, Donghyun; Taniguchi, Kiyoshi; Tian, Shu

doi:10.1016/j.najef.2019.04.012

Cited by 8 publications

(3 citation statements)

References 42 publications

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“…As evidenced in the current research, sub-samplings into different host countries sample enable for thorough comparison of research results. Recently, Park, Taniguchi, and Tian (2019) researched the determinants of domestic bias and foreign bias in the global bond market. The findings show that, foreign investors overweight the market with higher riskreturn profiles, lower volatility, and greater openness.…”

Section: Managerial Implications and Recommendationsmentioning

confidence: 99%

Foreign Bias in the Global Portfolio Investment of Selected OIC Countries

Md Elias

2023

IMBR

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Home bias reflects the propensity of investors to invest substantially in the domestic market. When investing abroad investors exhibit foreign bias, a tendency to overweight certain foreign markets based on their preferences. A thorough review of the literature reveals that foreign bias has not been thoroughly investigated in emerging countries, especially in the context of OIC countries. The purpose of this research is to examine the determinants of foreign bias in the global portfolio investment of selected OIC countries. An unbalanced bilateral panel data of 12 OIC countries’ outward equity investment in 74 host countries from the year 2001 to 2016 is analyzed. Cross-sectional analysis shows that OIC countries exhibit higher foreign bias towards their OIC counterparts especially in the MENA region. The results suggest, OIC countries not only exhibit foreign bias but also demonstrate regional bias. System Generalized Method of Moments (GMM) empirically shows that foreign bias is possibly explained by factors related to financial market openness, familiarity, information asymmetry, and global financial crisis. This study has a significant implication for the investors, fund managers and the regulators of the OIC countries. Investors and fund managers in OIC countries should be aware of the existence of foreign bias in their global portfolio investment that may potentially reduce the benefits of optimal diversification. It is a call for policymakers in the OIC countries to convince their local investors that international portfolio diversification offers risk sharing and eventually increases investment return.

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Section: Managerial Implications and Recommendationsmentioning

confidence: 99%

Foreign Bias in the Global Portfolio Investment of Selected OIC Countries

Md Elias

2023

IMBR

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“…Previous studies have almost exclusively focussed on determinants of suboptimal portfolio diversification (Ferreira and Miguel, 2011;Bhatta et al, 2018;Park et al, 2019;Luca and Tieman, 2019). However, the research on the role of central bank transparency in debt home and foreign bias remains limited.…”

Section: Introductionmentioning

confidence: 99%

The impact of central bank transparency on debt home and foreign bias

Mamoon

2024

Preprint

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This paper examines whether and how central bank transparency affects international bond/debt diversification. Using panel data from 39 countries, we find that central bank transparency reduces debt home bias. Further analysis shows that central bank transparency enhances debt foreign bias. This is consistent with the view that when the central bank is transparent, bondholders will be able to predict the monetary policy instruments that will be used to support price and financial market stability. The findings are robust to difference-in-difference, placebo test, moment-based cluster, mean heterogeneity across time and countries, missingness vs imputation, dynamic generalized method of moments, and fixed difference and fixed effects, our results are robust to quasi-natural. This study shows that bond investors pay attention to the transparency of the central bank which has implications for businesses, investors, researchers, and policymakers, particularly in emerging countries. JEL classification E58,F3, G2, G11,G15

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“…On the other hand, Germany also prioritizes investment in the groups of countries that participates in the same free trade agreements with this country. Park et al (2019) conducted a study to investigate the factors that determine the priority of foreign and domestic investment in 41 global bond markets. The research results show that transaction barriers such as capital controls, the application of separate taxes, additional transaction fees or asymmetric barriers in information and legal risks will prevent.…”

Section: Introductionmentioning

confidence: 99%

Determination the Priority of Factors Influencing Overseas Investment Destinations of Businesses Using an Analytic Hierarchy Process Method

Thanh

Minh²,

Cong

et al. 2021

Int. j. manag. entrep. res

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Because of the great benefits overseas investment brings, countries and businesses are increasingly concerned with the question of an ideal investment destination. Many studies have shown that, factors of the consumption market, the infrastructure and resources, economic and political environment have a significant impact on the decision to choose an investment location, however the priority order of these factors are different for various research spaces. By studying the specific case of Viettel Group - one of the largest telecommunications groups in Vietnam that is having many international investment activities in recent years, the study has been verified the priority order of factors influencing the decision to choose an overseas investment location of this corporation. The research outcomes show that the group of factors that have the most influence on investment decisions is the group "Consumption market", more specifically, the sub-factor "Market Size" is considered more than the others. Keywords: Investment Destinations, Foreign Investment Decision, Analytic Hierarchy Process.

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Determinants of foreign and domestic investment bias in global bond markets: Some empirical evidence

Cited by 8 publications

References 42 publications

Foreign Bias in the Global Portfolio Investment of Selected OIC Countries

Foreign Bias in the Global Portfolio Investment of Selected OIC Countries

The impact of central bank transparency on debt home and foreign bias

Determination the Priority of Factors Influencing Overseas Investment Destinations of Businesses Using an Analytic Hierarchy Process Method

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