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Title:Investor protection and foreign stakeholders PDF Logo
Authors:Giofré, Maela
Issue Date:2010
Series/Report no.:CESifo working paper Monetary Policy and International Finance 3102
Abstract:Different investor classes are endowed with different rights, and conflicting interests among them can make protections afforded to one party detrimental to another. Indeed, we find that investor protection laws have sizeable 'cross' effects on foreign portfolio investment and the direction of these effects supports the conjecture that foreign stakeholders are more sensitive to the perceived riskiness of assets than domestic investors. Specifically, we find that strong protection of creditor rights - limiting excessive risk taking - positively affects foreign shareholders, whereas strong protection of shareholder rights - potentially shifting firms toward riskier projects - negatively impacts foreign bondholders.
Subjects:international portfolio investments
investor protection
bondholders-shareholders conflicts
JEL:G11
G15
G30
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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