Rationality or politics? The color of black gold money

Mohamed Arouri, Sabri Boubaker, Wafik Grais, Jocelyn Grira

    Research output: Contribution to journalArticlepeer-review

    4 Citations (Scopus)

    Abstract

    The present study investigates the determinants of Arab sovereign wealth funds (SWFs) investment decisions. Using a sample of 223 listed firms targeted by SWFs over the 2000–2014 period (among which 73 are targeted by SWFs owned by Arab countries), we find that, in comparison to non-Arab SWFs, Arab SWFs prefer larger firms operating in strategic industries based in countries with higher levels of economic and capital market development, political stability, significant degree of confidence in rules and low degree of corruption. Moreover, Arab SWFs do not seem to have a tendency to invest in firms with higher liquidity, profitability, growth or dividend payout. Taken together, results based on the sample suggest that Arab SWFs’ acquisitions may not be solely motivated by purely financial considerations.

    Original languageEnglish
    Pages (from-to)62-76
    Number of pages15
    JournalQuarterly Review of Economics and Finance
    Volume70
    DOIs
    Publication statusPublished - Nov 2018

    Keywords

    • Arab region
    • Investment strategies
    • Political influence
    • Sovereign wealth funds

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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