4 Non-technical summary 5 1 Introduction 7 2 Related literature 11 3 The model 14 3.1 Setup 14 3.2 Stationary equilibria 18 4 Characterizing equilibrium flows and returns 19 4.1 The evolution of beliefs 20 4.2 Optimal portfolio choice 22 4.3 Equilibrium prices, predictability and hedging 24 4.4 Equilibrium flows and returns 26 5 Data 29 5.1 Dividends 29 5.2 Equity flows 32 5.2.1 Data sources 32...

likelihood of domestic welfare loss greater when a foreign investor buys a national company? (2) are economic concerns legitimate reasons that could justify interference by member states in the European Commission’s current approach to cross-border mergers? A thorough analysis of the literature suggests that the answer to both questions is no. Granting leeway to member states is unnecessary and...

The paper develops a model of foreign direct investments (FDI) and foreign portfolio investments (FPI). FDI enables the owner to obtain refined information about the firm. This superiority, relative to FPI, comes with a cost: a firm owned by the FDI investor has a low resale price because of asymmetric information between the owner and potential buyers. The model can explain several stylized fa...

PE investment is comparatively mature in developed countries. Along with the growing of PE investment in China in recent years, hi-tech enterprises of high growth potential are favored by PE investor. However, hi-tech enterprises in China are short of sufficient skills of strategy for bringing in foreign capital and objective qualifications in introducing PE investment. Therefore, this article ...

Do large investors increase the vulnerability of a country to speculative attacks in the foreign exchange markets? To address this issue, we build a model of currency crises where a single large investor and a continuum of small investors independently decide whether to attack a currency based on their private information about fundamentals. Even abstracting from signalling, the presence of the...

We examine the portfolio turnover of mutual funds from 29 countries across the world and for the period 1999 to 2004. Our results indicate that turnover in foreign securities is higher in the countries that are less developed, have less investor protection, have lower information disclosure standard, and are less familiar to the fund managers. The negative relationship between turnover in forei...