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Investor Protection and International Investment Positions: An Empirical Analysis *
Author(s) -
Cyrus Teresa L.,
İşcan Talan B.,
Starky Sheena
Publication year - 2006
Publication title -
international finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 39
eISSN - 1468-2362
pISSN - 1367-0271
DOI - 10.1111/j.1468-2362.2006.00181.x
Subject(s) - investor protection , creditor , economics , foreign direct investment , shareholder , monetary economics , investment (military) , international economics , capital flows , international investment , foreign portfolio investment , financial system , business , international trade , finance , return on investment , macroeconomics , open ended investment company , corporate governance , market economy , political science , debt , liberalization , production (economics) , politics , law
Given the recent revival of interest in the institutional determinants of global capital flows, we investigate the relationship between investor protection and international investment positions, using data on 40 countries for the period 1970–98. We find that strong shareholder protection is an important predictor of gross foreign direct investment liabilities, while countries with strong creditor protection tend to have positive stocks of net foreign assets. We conclude that the global pattern of investor protection is a significant determinant of international investment positions.