University of Hertfordshire

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By the same authors

Institutional investors’ allocation to emerging markets: A panel approach to asset demand.

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Original languageEnglish
Pages (from-to)47-64
Number of pages18
JournalJournal of International Financial Markets, Institutions and Money
Early online date25 Nov 2016
Publication statusPublished - 1 Mar 2017


This study assesses the factors driving insurance companies and pension funds’ portfolio allocation to emerging market assets. By making use of the Emerging Portfolio Fund Research database, it estimates asset demand equations for emerging markets’ equities and bonds for insurance companies and pension funds from advanced countries. These are estimated by using recent advances in the literature on panel autoregressive distributed lag models. Two key results emerge: firstly, consistent with ‘search for yield’ investment behaviour, weaker balance sheet conditions, measured by the lower funding level of pension funds, positively affect the asset allocation to emerging markets. Secondly, the accumulation of reserves by emerging markets is a significant attractor of foreign institutional investment.


© 2016 Elsevier B.V. This manuscript is made available under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0). For further details please see:

ID: 16612648