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Developing Asia’s Sovereign Wealth Funds and Outward Foreign Direct Investment. Asian Development Review, Vol. 26(2), pp. 57-85

dc.contributor.authorDonghyun Park
dc.contributor.authorGemma Estrada
dc.description.abstractSovereign wealth funds (SWFs) have emerged in developing Asia as a policy response to an unprecedented accumulation of foreign exchange (FX) reserves since 2000. At the same time, developing countries have become an increasingly important source of outward foreign direct investment (FDI). The central objective of this paper is to evaluate the prospects for SWFs to serve as a major conduit for the region’s outward FDI. In principle, FDI represents an attractive means of earning higher returns on FX reserves than traditional reserve assets. In practice, the limited institutional capacity and the political sensitivity of state-led FDI severely constrains the ability of developing Asia’s SWFs to undertake FDI on a significant scale. Therefore, the potential for developing Asia’s SWFs to become major sources of outward FDI is more apparent than real. This paper also explores the implications of the Santiago Principles and the global financial crisis on outward FDI by SWFs.
dc.publisherAsian Development Bank
dc.rightsCC BY 3.0 IGO
dc.titleDeveloping Asia’s Sovereign Wealth Funds and Outward Foreign Direct Investment. Asian Development Review, Vol. 26(2), pp. 57-85
dc.subject.adbForeign exchange reserves
dc.subject.adbEconomic Development
dc.subject.adbFinancial Crisis
dc.title.seriesAsian Development Review
dc.title.volumeVolume 26, Number 2, pp. 57-85
dc.contributor.imprintAsian Development Bank
oar.authorPark, Donghyun
oar.authorEstrada, Gemma

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  • Asian Development Review
    The Asian Development Review (ADR) is a professional journal for disseminating the results of economic and development research relevant to Asia and the Pacific. Since 1983, the ADR has been an important part of the history of the Asian Development Bank and its mission to reduce poverty across Asia and the Pacific.

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