Global Bond Portfolios and Emu

By Philip R. Lane. Social Science Research Network, 2006

229 citations recorded by the source corpus.

We examine the bilateral composition of international bond portfolios for the euro area and the individual EMU member countries. We find considerable support for “euro area bias”: EMU member countries disproportionately invest in one another relative to other country pairs. Another striking pattern is the positive connection between trade linkages and financial linkages in explaining asymmetries across EMU member countries in terms of their outward and inward bond investments vis-a-vis external counterparties. At the aggregate level, it is those countries physically closest to the euro area that are both the most important destinations and sources for external bond investment vis-a-vis the euro area. Our empirical results support the notion that financial regionalization is the leading force underlying financial globalization.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/5787dbf07fefcbfeb9bd53d28c361c62d3cd3de2

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Citations in the corpus

Current account imbalances and financial integration in the euro area (2011, unknown): “Lane (2006) finds that, controlling for other relevant influences, bilateral bond holding in the euro area are almost twice the size of bilateral holdings among other countries.”
Familiarity Breeds Investment: Diaspora Networks and International Investment (2010, background): “Our approach is 14 See Alfaro, Kelemli-Ozcan, and Volosovych (2006), Büthe and Milner (2008), and Jensen (2003) for a discussion of destination country factors that are correlated with capital inflows.”
Cross-Border Mergers and Acquisitions and European Integration (2009, unknown): “3 See Coeurdacier and Martin (2006), De Santis (2006), De Santis and Gerard (2006), Lane (2006).”
What Lies Beneath the Euro's Effect on Financial Integration? Currency Risk, Legal Harmonization, or Trade? (2010, unknown): “Yearfixed-effects account for global trends on banking integration (see Lane and Milesi-Ferretti (2008)), that might be reflected by the euro variable if not controlled.”
The geography of asset trade and the euro: insiders and outsiders (2009, methodology): “Our paper is very much related to the analysis of Lane (2006) on the impact of EMU on bond portfolios and Lane and Milesi-Feretti (2007) on portfolio equity investment by euro-area countries.”
Capital Flow Waves: Surges, Stops, Flight, and Retrenchment (2012, unknown): “…of the cross-country allocation of investment, see Burger, Warnock and Warnock (2010), Forbes (2010), Leuz, Lins and Warnock (2009), Lane and Milesi-Ferretti (2008), Lane (2006), Aggarwal, Klapper and Wysocki (2005), Bertaut and Kole (2004) Edison and Warnock (2004), and Faruqee, Li and Yan (2004).”
International portfolio diversification is better than you think (2011, background): “…Ahearne, Griever and Warnock, 2004);9 trade (Aviat and Coeurdacier, 2007; Lane and Milesi-Feretti, 2004); exchange rate risk and currency unions (Lane, 2006; Coeurdacier and Martin, 2009; De Santis and Gerard, 2006; Fidora et al., 2007); institutions (Wei and Gelos, 2005; Vlachos, 2004; Daude…”