HCBE Faculty Articles

Title

Threats to Foreign Equity Investments in International Capital Markets: Nationalism and Militarism

Document Type

Article

Publication Date

2013

Publication Title

Review of Pacific Basin Financial Markets and Policies

ISSN or ISBN

0219-0915

Volume

16

Issue/Number

3

First Page

1

Last Page

16

Abstract/Excerpt

Even though financial markets have become more integrated and international capital now moves more freely across borders, we argue that access to foreign equity investments still remains a political decision, and this policy decision is a function of the country's nationalistic and militaristic sentiments. We use military spending as a proxy for militarism and nationalism, and show that countries with high militaristic sentiments have lower foreign equity investments. We also look at bilateral equity flows and find that a pair of countries simultaneously having greater increases in militarism has lower bilateral equity investments.

DOI

10.1142/S0219091513500185

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