Tools of Survival: Sovereign Wealth Funds in Singapore and China

The rise of sovereign wealth funds (SWFs) as major investors in the global economy has raised worries that they serve the geopolitical ends of owner countries. However, given the paramount importance of surviving domestic political competitions, SWFs are likely also tools of domestic political survival. In examining the corporate governance and underlying political environment in which SWFs in Singapore and in China operate, this paper further examines the role of political unity in directing SWF behaviour in authoritarian regimes. The main finding is that a highly unified autocracy is more likely to direct SWFs to maximise long-term profit, while a fragmented one like China is more likely to treat its SWF as an arena for domestic political and bureaucratic infighting. SWFs operating in a fragmented regime are unlikely to make long-term profit and foreign policy objectives top priorities, and their behaviour can be highly unpredictable.     

Sovereign Wealth Funds and National Security: The Dog that Will Refuse to Bark

Concerns have been raised that Sovereign Wealth Funds (SWFs) might be used by governments to advance international political goals, raising red flags about their possible economic and national security consequences. These concerns are overstated. Warnings about national security threats related to foreign investment have been sounded repeatedly throughout history, but they have invariably been false alarms. Although there are novel attributes about SWFs in contemporary world politics, establishing their national security consequences is much more difficult than it might seem. And in those instances where theoretical connections between SWFs and “high politics” can be established, on closer inspection the SWFs appear to be intervening variables – manifestations of other pathologies – rather than the root cause of the postulated problem. The potential geopolitical problems caused by SWFs are the result of shifts in wealth in the international system, and not by the establishment or functioning of wealth funds.     

The world's greatest debtor nation?

The widely repeated assertion that the United States has become “the world's greatest debtor nation” is based on reports of its “net international investment position.” This position relates not exclusively to debt but rather to the difference between net United States claims to foreign assets and net foreign claims to United States assets. Major portions are equities and direct investment, the latter valued at “book” or original cost.Estimates of the current value of direct investment, either market value on the basis of share prices or replacement cost, effect huge asymmetric adjustments. As United States direct investment abroad is generally much older, it has appreciated much more than foreign direct investment in the United States. With adjustments as well for the market value of gold and for bad debts, it is estimated that the United States net international investment position was more or less in balance at the end of 1987 and in only relatively small deficit at the end of 1988.     

Domestic Sources of Twenty-first-century Geopolitics: Domestic Politics and Sovereign Wealth Funds in GCC Economies

The present article brings domestic politics into an analysis on sovereign wealth funds (SWFs) that are relevant for the study of contemporary geopolitics. What are the domestic drivers behind SWF creation, and how does a country’s domestic political environment affect the creation of these funds? Using a comparative historical case study on sovereign funds in Gulf Cooperation Countries, this article investigates the effects of domestic state–society structures on decisions about SWF creation and their evolving structure. Thereby, this article adds to an emerging stream of literature that looks at the drivers and implications of SWFs. One of the key findings of this analysis is that there are systematic links between the sovereign fund types and domestic structures; these structures include and exclude socio-economic actors that influence policy-making decisions.     

谈主权财富基金与西方投资保护措施

主权财富基金迅速崛起,成为全球资本市场上的重要一员,同时也引发了投资保护主义抬头.简要分析了投资保护主义的趋势和美国、德国采取的投资保护措施,提出了我国发展主权财富基金的若干建议.     

Reserves,Sovereign Wealth Funds and the Resilience of Global Imbalances

Reserves and sovereign wealth funds (SWFs) assets should be jointly considered for the assessment of global imbalances, hence their denomination as sovereign external assets (SEAs): both are public capital outflows from developing to developed countries, both hinder adjustment in current account surplus and deficit countries and, therefore, both contribute to sustain global imbalances. They represented 135 per cent and 50 per cent of net and gross US financing needs, respectively, in 2007. Reserves contribute 80 per cent and SWFs 20 per cent. They will go on providing resilience to the global imbalances, and the relative importance of SWFs is set to increase if commodity prices stay high.     

构建中的主权财富基金国际规则

活跃的主权财富基金(SWFs)在投资接受国中引起了怀疑与不安。各国的投资保护主义在一些国家的投资政策和立法中有所加强。本文介绍了国际货币基金组织(IMF)和经合组织(OECD)制定的有关SWFs和投资政策的国际准则,追踪国际投资制度的发展变化,研究SWFs国际规制的制度环境,思考我国主权财富基金(CIC)发展的应对之策。     

Shifts in Portfolio Preferences of International Investors: An Application to Sovereign Wealth Funds

We develop a dynamic general equilibrium model to analyze the macroeconomic effects of a shift in portfolio preferences of foreign investors. The model has two countries and two asset classes (equities and bonds). It is characterized by imperfect substitutability between assets and allows for endogenous adjustment in interest rates and asset prices. To illustrate the mechanics of the model, we calibrate it to analyze a transfer of reserves from central banks to sovereign wealth funds (SWFs). We look separately at two diversification paths: a shift away from dollar assets (path 1), and a shift away from US bonds to US equities (path 2). In path 1, the dollar depreciates and US net debt falls on impact and increases in the long run. In path 2, the dollar depreciates and US net debt increases in the long run.     

Sovereign Wealth in Abu Dhabi

By the turn of the century, oil had already made the tiny emirate of Abu Dhabi rich beyond anyone's wildest dreams. A sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA), has invested extra oil revenues abroad for more than thirty years and amassed a still-growing portfolio worth approximately $750–900 billion. ADIA is widely believed to be the world's largest sovereign wealth fund – indeed the world's largest institutional investor. But Abu Dhabi is not yet a “developed” economy. So, in 2002, the Mubadala Development Company was established as a government-owned investment vehicle. Unlike ADIA's mandate to build and manage a financial portfolio, Mubadala's charge was to develop Abu Dhabi. According to some observers, ADIA was a “sovereign savings fund,” while Mubadala was a government-owned investment firm. Mubadala is supposed to invest the wealth of the emirate in activities that would diversify the economy away from energy and into industry and services. Although each Mubadala investment is supposed to earn large returns, the strategy balances financial against “strategic” returns. ADIA and Mubadala are the institutional architecture to manage the wealth of the Abu Dhabi sovereign.     

Sovereign Risk and Out‐of‐Equilibrium Exchange Rate Dynamics

We show that the sovereign risk premium contains important information on short‐run exchange rate dynamics in emerging economies. Net foreign assets serve as the key link between both variables, which acts as a “crude form of collateral.” We present two sets of empirical evidence. First, we show that increases in net foreign assets provide a statistically significant reduction on emerging markets sovereign risk premium. Then, we show that out‐of‐sample forecasts using realized values for the sovereign risk premium have a satisfactory performance when evaluated across three metrics: the mean squared error ratio, the direction of change statistic, and the consistency criterion.     

Country factors and the investment decision-making process of sovereign wealth funds

In this paper, we examine the complex decision-making processes that lead to sovereign wealth funds' (SWFs’) choice of investment location. Using a two-tiered dynamic Tobit panel model, we find that country-level factors do not have the same impacts on the investment decision and the amount to invest and that SWFs tend to invest more frequently and at higher amounts in countries in which they have already invested. More specifically, we find that SWFs prefer to invest in countries with higher political stability, whereas they are more prone to invest large amounts in countries that are less democratic and more financially open. Our results also lend support to the idea that SWFs are prudent in their choice of a target country with regard to their investment decision but behave as more opportunistic investors with regard to the amounts to be invested.     

中国主权财富基金的投资绩效研究

本文利用事件研究法（event study）实证研究了中国主权财富基金的投资绩效。在整理中国四家主权财富基金2007年12月-2010年6月进行的28项国内外上市公司投资数据的基础上,通过计算平均异常收益（AAR）和累积平均异常收益（CAAR）等指标,对目标公司在投资宣布日附近的股价异常波动情况进行估计和检验。同时,利用长期效应度量方法来度量中国主权财富基金投资行为的长期绩效。     

政府水污染防治对重点流域企业投资的影响——基于PSM-DID方法的实证分析

基于2010—2017年间我国中部六省上市公司固定资产投资数据,运用双重差分方法检验了《重点流域水污染防治项目管理暂行办法》对相关企业投资的影响,研究发现:该《办法》实施后对中部六省重污染行业的固定资产投资具有显著的抑制效应,且表现出较好的持续性;通过对中部六省三大产业进行横向对比分析发现,其对固定资产投资的抑制作用仅在包含重污染企业的第二产业内显著存在,而对第一产业内企业投资的抑制作用存在明显的滞后现象,同时对第三产业内的企业投资不存在显著影响;结合倾向得分匹配法以及排除预期效应和测量误差后,其对重污染企业投资抑制作用的直接效应和持续效应依旧存在,说明研究结论是稳健的。     

论主权财富基金的理论逻辑

主权财富基金是国际金融市场一类崭新的有影响力的机构投资者。全球的主权财富基金的现有规模大概在3万亿美元左右。其规模还将继续不断增长。从主权财富基金兴起的原因看,首先,国际货币体系的变革是主权财富基金兴起的根本原因;其次,能源价格上涨是导致主权财富基金规模扩张的重要原因;最后,经济全球化为主权财富基金的运作提供了良好的环境。根据"国家经济人模型",国家在经济发展的初期和高增长阶段,外汇储备迅速增加,国家逐步将盈余财富用于投资。然而,随着生产要素的消耗,国家积累的财富逐步达到顶峰。当国家经济进入富裕导向阶段或稳定低增长阶段时,国家需要消费积累的财富,投资也倾向于无风险资产。目前看,各国设立主权财富基金主要有五方面目标:(1)跨期平滑国家收入;(2)协助中央银行分流外汇储备;(3)跨代平滑国家财富;(4)预防国家社会经济危机;(5)支持国家发展战略。     

Sovereign-Wealth Funds: the institutional dimension

In the recent past, the operations of the capital-rich Sovereign-Wealth Funds (SWFs) went on increasing in the global capital markets. As the global economic crisis that started in 2007 deepened, SWF operations dramatically spurted, leading to further progressive increase in their significance for the global capital markets. For all appearances they are going to be important financial players in the foreseeable future. This article focuses on the basic concept of SWFs, their structure and operations. It attempts to analyze and elucidate on them. Notwithstanding the fact that SWFs are an instrument of enhancing liquidity and financial resource allocation in the international capital market, they managed to become a source of controversies. Consequently they became a source of escalation in financial protectionism in several advanced industrial economies, in particular the USA. The article concludes that this was unwarranted. Recently SWFs have attempted to device an array of best practices to improve the transparency of their global financial operations. These measures are expected to enhance the acceptance of SWFs as well as global recognition of their operations. They would also help in dispelling the negative image that SWFs have held in several advanced industrial economies.

Elections, Opportunism, Partisanship and Sovereign Ratings in Developing Countries

We empirically examine whether and how opportunistic and partisan political business cycle (“PBC”) considerations explain election‐period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk‐ratings (“ratings”). Analyses of 391 agency ratings for 19 countries holding 39 presidential elections from 1987–2000, initially suggest that elections themselves prompt rating downgrades consistent with opportunistic PBC considerations, that incumbents are all likely to implement election‐period policies detrimental to post‐election creditworthiness. But more refined analyses, integrating both opportunistic and partisan PBC considerations in a unified framework, suggest that election‐period agency downgrades (upgrades) are more likely as right‐wing (left‐wing) incumbents, become more vulnerable to ouster by challengers. Together, these results underscore the importance of integrating both opportunistic and partisan PBC considerations into any explanation of election‐period risk assessments of agencies and, perhaps, other private, foreign‐based financial actors important to the pricing and allocation of capital for lending and investment in the developing world.     

Hiring as Investment Behavior

This paper explores the determinants of hiring at the macroeconomic level. It treats the hiring decision as an investment decision, similar to the one taken for physical capital or for financial assets. At its core is a present value relation which defines the worker's “asset value” for the firm and determines optimal hiring. The paper validates this relation using volatility tests and infers the unobserved asset values by estimating it. Hiring and asset values are found to be weakly correlated with the business cycle and much more volatile. The paper also demonstrates the links between models employed and issues examined in finance and the labor market.     

WAGES,PROFITS AND CAPITAL FLIGHT*

We model capital flight as the outcome of a non-cooperative differential game between workers (who control the wage share) and capitalists (who control investment at home and abroad). There are three equilibria for such a game. Along the interior equilibrium, the domestic economy becomes “decapitalized” as investors build up their holdings of foreign assets, in a situation reminiscent of the experience of several developing countries.     

Flexible Adjustment in the Age of Financialisation: The Case of Norway

Norway's “Government Pension Fund” – Global (GPF-G) is large (around $400b), portfolio oriented and transparent. It tries to be ethical and has been mooted as a role model for other SWFs. The way the GPF-G is set up undergirds the US vision of a financialised world economy and it even indirectly supports US warfare in Iraq by buying treasury bills. It is also a leader in ethical investments – more than 20 private funds piggyback any divestment decision the GPF-G makes. Understanding the international implications of the GPF-G does not, however, amount to an explanation of why this vehicle was created. This article puts forward the argument that if we want to understand why and how these diverse behaviours cohere into a larger strategic whole, the fund must be interpreted as the continuation and technocratisation of a long established corporatist tradition of foreign economic policy that Peter Katzenstein more than 25 years ago labelled a strategy of flexible adjustment and domestic compensation.     

“互联网+”战略、金融资产配置与企业创新投资——来自数字化企业的准自然实验

数字经济背景下，互联网对企业创新的作用日益凸显。数字化企业作为国家“互联网+”战略实施的“排头兵”，过度持有金融资产会对创新投资产生挤出效应，从而不利于国家创新能力提升和经济发展。互联网时代，能否通过“互联网+”战略促使数字化企业降低金融资产配置水平，从而促进创新投资成为亟待解决的问题。以2010—2020年沪深A股上市公司为样本，实证检验“互联网+”战略实施、数字化企业金融资产配置与创新投资三者间的互动关系。结果发现，“互联网+”战略能够通过降低数字化企业金融资产配置水平促进创新投资，即金融资产配置在“互联网+”战略与数字化企业创新投资间发挥部分中介效应。进一步将创新投资细分为探索式和利用式创新投资发现，“互联网+”战略能够促进数字化企业探索式创新投资，抑制利用式创新投资，同时金融资产配置在“互联网+”战略与探索式创新投资间难以发挥中介效应，但在“互联网+”战略与利用式创新投资间发挥遮掩效应；对企业金融资产配置的蓄水池动机和替代动机进行检验发现，“互联网+”战略能够削弱数字化企业的蓄水池动机，对替代动机无显著影响。结论能够为国家更好地发展互联网经济，合理配置数字化企业金融资产，优化创新投资提供经验借鉴和实证支持。