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The role of institutional factors when determining investment strategies of sovereign wealth funds in stock market

Author

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  • Mehmet AKYOL

    (Gümüþhane University, FEAS, Department of Economics, Gümüþhane, Turkey.)

  • Yýldýrým Beyazýt ÇÝÇEN

    (Gümüþhane University, FEAS, Department of Economics, Gümüþhane, Turkey.)

Abstract

Sovereign Wealth Funds (SWF) are investment vehicles of governments which use its assets in hand for the favor of public interest. SWFs invest a vast amount of money that varies in amount from year to year both in national and international platforms. Funds which provide an excellent source mean a lot for developed countries as much as they mean to developing countries. In this study, the factors SWFs consider while investing in the stock market are analyzed. Panel data is chosen for analysis using SWF and Heritage institutional factor index. New Zeeland is selected as example to illustrate that from which institutional factor, such as private property right, law enforcement, tax responsibility and freedom of labor, influenced investments New Zeeland SWF made in stock markets of 42 different countries.

Suggested Citation

  • Mehmet AKYOL & Yýldýrým Beyazýt ÇÝÇEN, 2017. "The role of institutional factors when determining investment strategies of sovereign wealth funds in stock market," Turkish Economic Review, KSP Journals, vol. 4(3), pages 334-342, September.
    • Handle: RePEc:ksp:journ2:v:4:y:2017:i:3:p:334-342
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    References listed on IDEAS

    as
    1. Dilip Das, 2009. "Sovereign-Wealth Funds: the institutional dimension," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 56(1), pages 85-104, March.
    2. Nuno Fernandes, 2014. "The Impact of Sovereign Wealth Funds on Corporate Value and Performance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 26(1), pages 76-84, March.
    3. Dewenter, Kathryn L. & Han, Xi & Malatesta, Paul H., 2010. "Firm values and sovereign wealth fund investments," Journal of Financial Economics, Elsevier, vol. 98(2), pages 256-278, November.
    4. William L. Megginson & Miao You & Liyan Han, 2013. "Determinants of Sovereign Wealth Fund Cross-Border Investments," The Financial Review, Eastern Finance Association, vol. 48(4), pages 539-572, November.
    5. Raffaele Della Croce & Juan Yermo, 2013. "Institutional Investors and Infrastructure Financing," OECD Working Papers on Finance, Insurance and Private Pensions 36, OECD Publishing.
    6. Valeria Miceli, 2013. "Do sovereign wealth funds herd in equity markets?," Quantitative Finance, Taylor & Francis Journals, vol. 13(10), pages 1503-1518, October.
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    Cited by:

    1. Megginson, William L. & Gao, Xuechen, 2020. "The state of research on sovereign wealth funds," Global Finance Journal, Elsevier, vol. 44(C).
    2. Alvaro Cuervo-Cazurra & Anna Grosman & Geoffrey T. Wood, 2023. "Cross-country variations in sovereign wealth funds’ transparency," Journal of International Business Policy, Palgrave Macmillan, vol. 6(3), pages 306-329, September.

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    More about this item

    Keywords

    Sovereign Wealth Funds; Stock markets; Investment; Institutional factors.;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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