Rationality or politics? The color of black gold money

Mohamed Arouri; Sabri Boubaker; Wafik Grais; Jocelyn Grira

doi:10.1016/j.qref.2018.05.002

Rationality or politics? The color of black gold money

Mohamed Arouri, Sabri Boubaker, Wafik Grais, Jocelyn Grira

Faculty of Business

Research output: Contribution to journal › Journal Article › peer-review

11 Citations (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	62-76
Number of pages	15
Journal	Quarterly Review of Economics and Finance
Volume	70
DOIs	https://doi.org/10.1016/j.qref.2018.05.002
Publication status	Published - Nov. 2018

Keywords

Arab region
Investment strategies
Political influence
Sovereign wealth funds

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10.1016/j.qref.2018.05.002

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title = "Rationality or politics? The color of black gold money",

abstract = "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{\textquoteright} acquisitions may not be solely motivated by purely financial considerations.",

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AU - Arouri, Mohamed

AU - Boubaker, Sabri

AU - Grais, Wafik

AU - Grira, Jocelyn

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

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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 -

Rationality or politics? The color of black gold money

Abstract

Keywords

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