Political Ideology and International Capital Allocation / Elisabeth Kempf, Mancy Luo, Larissa Schäfer, Margarita Tsoutsoura.

Format:

Book

Author/Creator:

Kempf, Elisabeth.

Contributor:

National Bureau of Economic Research.

Luo, Mancy.

Schäfer, Larissa.

Tsoutsoura, Margarita.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29280.

NBER working paper series no. w29280

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

Does investors' political ideology shape international capital allocation? We provide evidence from two settings-syndicated corporate loans and equity mutual funds-to show ideological alignment with foreign governments affects the cross-border capital allocation by U.S. institutional investors. Ideological alignment on both economic and social issues plays a role. Our empirical strategy ensures direct economic effects of foreign elections or government ties between countries are not driving the result. Ideological distance between countries also explains variation in bilateral investment. Combined, our findings imply ideological alignment is an important, omitted factor in models of international capital allocation.

Notes:

Print version record

September 2021.