FOREIGN BIAS of SOVEREIGN WEALTH FUND and SPATIAL SPILLOVER EFFECTS

Hongxia Zhang, Heeho Kim

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

This study explores a foreign bias model to examine if the degree of foreign bias of sovereign wealth fund depends on the spatial spillover effects of cultural distances. Using the spatial panel data of foreign investment by sovereign wealth fund in 2008-2014, we empirically test (1) whether the relationships between return, risk and foreign bias of sovereign wealth fund are statistically significant and (2) whether this relationship depends on the spatial spillover effects of cultural distances. The evidence strongly supports our hypotheses across six target countries (Australia, Canada, China, Germany, the United Kingdom and the United States).

Original languageEnglish
Pages (from-to)377-397
Number of pages21
JournalSingapore Economic Review
Volume64
Issue number2
DOIs
StatePublished - 1 Mar 2019

Keywords

  • foreign bias
  • risk
  • Sovereign wealth fund
  • spatial spillover effects

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