Foreign portfolio investment patterns: evidence from a gravity model

Lei Pan, Rong Hu, Qingyuan Du

Research output: Contribution to journalArticleResearchpeer-review


Cross-country capital flows have been widely studied in the literature; however, why some countries may form more similar foreign investment portfolios than others has not been investigated. Using data for a broad panel of countries during the period 2002–2015, we adopt gravity equations to estimate cross-country foreign portfolio investment patterns. The main empirical results reveal that countries are more likely to form similar foreign portfolio investment patterns if: (i) countries are geographically closer; (ii) countries share the same official language; and (iii) countries adopt fixed exchange rate regimes.

Original languageEnglish
Pages (from-to)391-415
Number of pages25
JournalEmpirical Economics
Publication statusPublished - 2022


  • Exchange rate regimes
  • Foreign portfolio investment
  • Gravity

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