The Determinants of China’s International Portfolio Equity Allocations

Abstract

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Determinants of foreign investment in Pakistan

“…, andJain et al, (2017). Whereas, findings of this study are in stark contrast with findings ofAgarwal et al (2020).…”

“…Using data from 41 countries, Jain et al (2017) report significant positive relations between stock market returns and portfolio inflows in a host country. In contrast, Agarwal et al, (2020) find that stock market returns of a host country do not play any significant role in Chinese portfolio investment abroad. This differences of opinion motivate us to test further the effect of stock market returns on foreign investment in Pakistan.…”

“…Finally, country-level governance mechanisms affect corporate governance practice in a firm as it affects the bonding cost of effective governance and benefits arising from it (Doidge et al, 2007;Lang et al, 2020). The effective governance mechanisms in a host country reduce the chances of expropriation by both state officials and firm managers (Andrade and Chhaochharia, 2010;Agarwal et al, 2020). Hence, this study aims to examine how after issuance of Corporate Governance Code (2002) by the Securities and Exchange Commission of Pakistan, firms have improved their governance structure by investing its effect on foreign investment.…”

Chinese Investment in Latin America: Sectoral Complementarity and the Impact of China’s Rebalancing

“…The model specification is in line withFuest et al (2019) andAgarwal et al (2020).8 Agarwal et al (2020) found that Chinese institutional investors are biased towards sectors in which China has a comparative disadvantage and the destination countries have a comparative advantage in their foreign portfolio allocations.9 Many studies in the literature, such asFuest et al (2019), used the Bureau van Dijk Zephyr database Bollaert and Delanghe (2015). find that the Thomson Reuters dataset might be superior due to two main shortcomings of the Zephyr dataset: (i) continuous overwriting of firm-level data; and (ii) inaccuracies in announcement dates.…”

“…In particular, the RCA index captures the extent to which a country is better than the rest of the world at producing goods/services in a certain sector. As shown in Agarwal et al (2020), the RCA index can help explain China's international portfolio equity allocations. 8 As a robustness check, we also replace industry FE with firm FE to control for firm-specific factors.…”