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Cross-Border Portfolio Investment and Financial Markets Development in the Asia and Pacific Region
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Cross-Border Portfolio Investment and Financial Markets Development in the Asia and Pacific Region

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  • Sayuri Shirai
  • Eric Alexander Sugandi

Abstract

This study examines cross-border portfolio investment in the Asia and Pacific region throughout 2001–2017, where rapid increases in investment have taken place particularly after the 2008–2009 global financial crisis. Cross-border portfolio investment in this region has the following characteristics. First, equity has been a dominant source of foreign liabilities notwithstanding efforts to develop bond markets in the region. Second, debt securities have remained dominant foreign assets held by the region. Third, the region’s assets and liabilities linkages have remained overwhelmingly strengthened against the United States and the European Union. However, the region has also witnessed greater intra-regional financial integration, centering at China with growing linkages with Hong Kong and Singapore. Fourth, Japan as a country with the largest abundant domestic capital in the region has remained predominantly exposed to the United States and the European Union. Within the region, nonetheless, debt securities issued by Australia have increasingly attracted Japan’s capital.

Suggested Citation

  • Sayuri Shirai & Eric Alexander Sugandi, 2019. "Cross-Border Portfolio Investment and Financial Markets Development in the Asia and Pacific Region," International Business Research, Canadian Center of Science and Education, vol. 12(5), pages 14-33, May.
    • Handle: RePEc:ibn:ibrjnl:v:12:y:2019:i:5:p:14-33
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    More about this item

    Keywords

    portfolio investment; financial markets development; Asia and Pacific;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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