DP4476 | Transparency and International Portfolio Holdings

Publication Date

23/07/2004

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Abstract

Does country transparency affect international portfolio investment? We examine this question by constructing new measures of transparency and by making use of a unique micro dataset on portfolio holdings of emerging market funds around the world. We distinguish between government and corporate transparency. There is clear evidence that funds invest systematically less in less transparent countries. There is also some evidence that during crises, funds flee from non-transparent countries to a greater extent.