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Lookup NU author(s): Dr Wessel Vermeulen
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).
In this paper we show that domestic economic and political characteristics can explain why some countries established a Sovereign Wealth Funds (SWFs) and others not. We find that 1) the existence of natural resources profits, 2) the government structure and 3) the ability to invest in a socially beneficial way in the domestic economy can explain this choice. At the same time these same factors do not relate to the size of the national savings. We use a sample of countries that established a SWF in the period 1998-2008 and compare them to those that did not set up a fund in the same period. The results suggest that SWFs tend to be established in autocratically run countries that have difficulties finding suitable opportunities for domestic investments.
Author(s): Carpantier J-F, Vermeulen WN
Publication type: Article
Publication status: Published
Journal: Journal of Commodity Markets
Year: 2018
Volume: 11
Pages: 1-21
Print publication date: 01/09/2018
Online publication date: 02/02/2018
Acceptance date: 22/01/2018
Date deposited: 27/01/2018
ISSN (print): 2405-8513
ISSN (electronic): 2405-8505
Publisher: Elsevier BV
URL: https://doi.org/10.1016/j.jcomm.2018.01.002
DOI: 10.1016/j.jcomm.2018.01.002
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