VGSF - WU Vienna - LC

Matteo Maggiori, Stanford Graduate School of Business

online via Microsoft Teams Live Events 17:30 - 18:30

Organizer VGSF

As part of the ser­ies of the "Fin­ance Re­search Sem­inar", VGSF wel­comes Mat­teo Mag­giori from the Stan­ford Gradu­ate School of Busi­ness to present his re­search pa­per.
Per­sonal Webpage

Pa­per

Re­draw­ing the Map of Global Cap­ital Flows: The Role of Cross-Bor­der Fin­an­cing and Tax Havens

Global firms fin­ance them­selves through for­eign sub­si­di­ar­ies, often shell com­pan­ies in tax havens, which ob­scures their na­tion­al­ity in ag­greg­ate stat­ist­ics. We as­so­ci­ate the uni­verse of traded se­cur­it­ies with their is­suer’s ul­timate par­ent and restate bi­lat­eral in­vest­ment pos­i­tions to bet­ter re­flect the true fin­an­cial link­ages con­nect­ing coun­tries around the world. We find that port­fo­lio in­vest­ment from developed coun­tries to firms in large emer­ging mar­kets is dra­mat­ic­ally lar­ger than pre­vi­ously thought. The na­tional ac­counts of the United States, for example, un­der­state the U.S. pos­i­tion in Chinese firms by nearly 600 bil­lion dol­lars, while Ch­ina’s of­fi­cial net cred­itor pos­i­tion to the rest of the world is over­stated by about 50 per­cent. We ad­di­tion­ally show how tak­ing ac­count of off­shore is­su­ance is im­port­ant for our un­der­stand­ing of the cur­rency com­pos­i­tion of ex­ternal port­fo­lio li­ab­il­it­ies, the nature of for­eign dir­ect in­vest­ment, and the growth of fin­an­cial glob­al­iz­a­tion.



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