TY - JOUR
T1 - Rationality or politics? The color of black gold money
AU - Arouri, Mohamed
AU - Boubaker, Sabri
AU - Grais, Wafik
AU - Grira, Jocelyn
N1 - Publisher Copyright:
© 2018 Board of Trustees of the University of Illinois
PY - 2018/11
Y1 - 2018/11
N2 - The present study investigates the determinants of Arab sovereign wealth funds (SWFs) investment decisions. Using a sample of 223 listed firms targeted by SWFs over the 2000–2014 period (among which 73 are targeted by SWFs owned by Arab countries), we find that, in comparison to non-Arab SWFs, Arab SWFs prefer larger firms operating in strategic industries based in countries with higher levels of economic and capital market development, political stability, significant degree of confidence in rules and low degree of corruption. Moreover, Arab SWFs do not seem to have a tendency to invest in firms with higher liquidity, profitability, growth or dividend payout. Taken together, results based on the sample suggest that Arab SWFs’ acquisitions may not be solely motivated by purely financial considerations.
AB - The present study investigates the determinants of Arab sovereign wealth funds (SWFs) investment decisions. Using a sample of 223 listed firms targeted by SWFs over the 2000–2014 period (among which 73 are targeted by SWFs owned by Arab countries), we find that, in comparison to non-Arab SWFs, Arab SWFs prefer larger firms operating in strategic industries based in countries with higher levels of economic and capital market development, political stability, significant degree of confidence in rules and low degree of corruption. Moreover, Arab SWFs do not seem to have a tendency to invest in firms with higher liquidity, profitability, growth or dividend payout. Taken together, results based on the sample suggest that Arab SWFs’ acquisitions may not be solely motivated by purely financial considerations.
KW - Arab region
KW - Investment strategies
KW - Political influence
KW - Sovereign wealth funds
UR - http://www.scopus.com/inward/record.url?scp=85047253976&partnerID=8YFLogxK
U2 - 10.1016/j.qref.2018.05.002
DO - 10.1016/j.qref.2018.05.002
M3 - Journal Article
AN - SCOPUS:85047253976
SN - 1062-9769
VL - 70
SP - 62
EP - 76
JO - Quarterly Review of Economics and Finance
JF - Quarterly Review of Economics and Finance
ER -