A Study on the Relationship between the Investment of Institutional Investors and Macroeconomic Prudence. Issue 1 (2nd January 2020)

• Record Type: Journal Article
• Authors: Kim, Jong-Hee
• Is Part Of: Global economic review. Volume 49:Issue 1(2020)
• Page Start: 43
• Page End: 59
• Publication Date: 2020-01-02
• Subjects: Institutional investors -- pension funds -- macroeconomic prudence -- portfolio type -- return decomposition; G11 -- G23; International economic relations -- Periodicals; Economic history -- 1990- -- Periodicals; East and West -- Periodicals; 337.05
• DOI: 10.1080/1226508X.2020.1726789
• Languages: English
• ISSNs: 1226-508X

Abstract

ABSTRACT: This paper analyses the financial assets of institutional investors and pension funds to estimate how the change in portfolio affects returns and whether the realisation of returns can improve macroeconomic prudence. From the analysis, this paper offers several findings. First, the increase in the weighted return rates of institutional investors and pension funds lowers GDP volatility and improves macroeconomic prudence. Second, the portfolio composition effect of institutional investors and pension funds can also affect improving macroeconomic prudence. And the effect of composition effect in macroeconomic prudence improvement is greater in countries with high financial openness, for both institutional investors and pension funds.