Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/38884 
Authors: 
Year of Publication: 
2010
Series/Report no.: 
CESifo Working Paper No. 3102
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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
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