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- Publisher
- World Scientific Publishing Company
- Copyright
- Copyright ©
- ISSN
- 0217-5908
- eISSN
- 1793-6837
- DOI
- 10.1142/S0217590813500124
- Publisher site
- See Article on Publisher Site
Abstract
We examine statistical importance of a number of institutional factors, which have been alleged by market investors and policy commentators as significant barriers on cross-border portfolio investment in East Asian economies, but never been put to empirical tests yet. Taking advantage of the novel data set constructed by the ABMI-GoE, we empirically investigate the explanatory power of such institutional factors as market access-hindering regulations, foreign exchange controls, credit controls, taxation and inefficient post-trading infrastructure. We find that these alleged barriers indeed have significantly negative impacts on cross-border portfolio investment in East Asian economies. In addition, we find some support for the "pecking order" hypothesis in barriers on cross-border portfolio investment in the sense that barriers on post-trading efficiency and cost barriers are not effective unless barriers on market access are significantly lowered.
Journal
The Singapore Economic Review – World Scientific Publishing Company
Published: Jun 1, 2013
Keywords: Cross-border portfolio investment barriers to cross-border investment Asian Bond Markets Initiative foreign exchange controls settlement infrastructure