TY - JOUR
T1 - Does political risk matter for sovereign wealth funds? International evidence
AU - Grira, Jocelyn
AU - Labidi, Chiraz
AU - Rouatbi, Wael
N1 - Funding Information:
We gratefully acknowledge financial support from United Arab Emirates University's Program for Advanced Research, from United Arab Emirates University's Center for Public Policy and Leadership, and from Abu Dhabi Department of Education and Knowledge.
Publisher Copyright:
© 2018 Elsevier Inc.
PY - 2022/5
Y1 - 2022/5
N2 - We investigate the impact of political risk on the investment decisions of sovereign wealth funds (SWFs). Using an international sample of 302 targets involved in 427 SWFs' deals, we find that political risk matters in determining SWFs' portfolio strategies. Among the four dimensions of political risk, we show that conflicts and democratic tendencies are the main components that explain variations in SWF behaviour, whereas the quality of institutions and government action matter less. Our results are robust to a battery of sensitivity tests, alternative model specifications, subsample analysis, and cultural bias.
AB - We investigate the impact of political risk on the investment decisions of sovereign wealth funds (SWFs). Using an international sample of 302 targets involved in 427 SWFs' deals, we find that political risk matters in determining SWFs' portfolio strategies. Among the four dimensions of political risk, we show that conflicts and democratic tendencies are the main components that explain variations in SWF behaviour, whereas the quality of institutions and government action matter less. Our results are robust to a battery of sensitivity tests, alternative model specifications, subsample analysis, and cultural bias.
KW - Conflicts
KW - Democratic tendencies
KW - Political risk
KW - Quality of institutions
KW - Sovereign wealth funds
UR - http://www.scopus.com/inward/record.url?scp=85051137601&partnerID=8YFLogxK
U2 - 10.1016/j.irfa.2018.07.013
DO - 10.1016/j.irfa.2018.07.013
M3 - Journal Article
AN - SCOPUS:85051137601
SN - 1057-5219
VL - 81
JO - International Review of Financial Analysis
JF - International Review of Financial Analysis
M1 - 101236
ER -