Abstract
Information voids reflect a lack of publicly available information about a country’s investment climate, and represent the information problems associated with institutional voids. We argue that foreign investors differ in their sensitivity to information voids based on their own private information and their flexibility in responding rapidly to change. We predict that foreign banks will be least hampered by information voids, due to their privileged access to private information about local conditions and ability to adapt quickly to new information. Portfolio investors, while impeded by information voids due to their severely limited access to local private information, are able to quickly respond to new information. Foreign direct investors have moderate access to local private information, yet their inability to adapt quickly creates problems dealing with information voids. Using time-series cross-sectional data on local public information and capital flows to the thirty largest emerging markets from 1994 to 2012, we find preliminary support for our hypotheses regarding the sensitivity of different investors to information voids. We find that direct investors are most sensitive to information voids and banks are least sensitive, while portfolio investors are moderately sensitive.
Résumé
Les vides informationnels reflètent un manque d’informations publiquement disponibles sur le climat d’investissement d’un pays et représentent des problèmes d’informations associés à des vides institutionnels. Nous considérons que les investisseurs étrangers diffèrent dans leur sensibilité concernant les vides informationnels en fonction de leurs propres informations privées et de leur flexibilité à répondre rapidement au changement. Nous prévoyons que les banques étrangères seront moins entravées par les vides informationnels, en raison de leur accès privilégié aux informations privées sur les conditions locales et de leur capacité à s’adapter rapidement à de nouvelles informations. Les investisseurs de portefeuille, bien que bloqués par les vides informationnels en raison de leur accès sérieusement limité aux informations privées locales, sont capables de répondre rapidement à de nouvelles informations. Les investisseurs directs étrangers ont un accès modéré aux informations privées locales, mais leur incapacité à s’adapter rapidement crée des problèmes pour faire face aux vides informationnels. En utilisant des données transversales de séries chronologiques sur les informations publiques locales et les flux de capitaux dans les trente plus grands marchés émergents de 1994 à 2012, nous trouvons une validation préliminaire pour nos hypothèses concernant la sensibilité des différents investisseurs aux vides informationnels. Nous constatons que les investisseurs directs sont les plus sensibles et que les banques sont les moins sensibles aux vides informationnels, alors que les investisseurs de portefeuille sont moyennement sensibles.
Resumen
Los vacíos de información reflejan una falta de información pública acerca del clima de información en un país, y representa problemas de información asociados con vacíos institucionales. Argumentamos que los inversionistas extranjeros difieren en cuanto a su sensibilidad a los vacíos de información basándose en su propia información privada acerca de las condiciones locales y la habilidad para adaptarse rápidamente a información nueva. Anticipamos que los bancos extranjeros estarán menos impedidos con vacíos de información, debido a su acceso privilegiado a información privada sobre las condiciones y su habilidad de adaptarse rápidamente a la información nueva. Los inversionistas de portafolio, aunque impedidos con vacíos institucionales debido a su severamente limitado acceso a información local privada, son capaces de responder rápidamente a información nueva. Los inversionistas extranjeros directos tienen un acceso moderado a información local privada, pese a esto su incapacidad de adaptarse rápidamente crea problemas al enfrentarse a vacíos institucionales. Usando series de tiempo y datos intersectoriales de información local pública y flujos de capitales hacia el tercer más grande mercado emergente entre 1994 y 2012, encontramos apoyo para nuestras hipótesis en cuanto a la sensibilidad de diferentes inversionistas a vacíos de información. Encontramos que los inversionistas directos son más sensibles a vacíos institucionales y los bancos son menos sensibles, mientras los inversionistas de portafolio son moderadamente sensibles.
Resumo
Os vazios de informação refletem a falta de informação publicamente disponível sobre o clima de investimento de um país e representam os problemas de informação associados aos vazios institucionais. Argumentamos que os investidores estrangeiros diferem em sua sensibilidade aos vazios de informação com base em sua própria informação privada e sua flexibilidade em responder rapidamente a mudanças. Prevemos que os bancos estrangeiros serão menos prejudicados por vazios de informação, devido ao seu acesso privilegiado a informações privadas sobre as condições locais e a capacidade de adaptar-se rapidamente a novas informações. Os investidores de carteiras, embora obstruídos por vazios de informação devido ao seu acesso severamente limitado à informação privada local, são capazes de responder rapidamente a novas informações. Investidores diretos estrangeiros têm acesso moderado à informação privada local, mas sua incapacidade de se adaptar rapidamente cria problemas para lidar com vazios de informação. Utilizando dados seccionais em série temporal sobre informação pública local e fluxos de capital para os trinta maiores mercados emergentes de 1994 a 2012, encontramos apoio preliminar às nossas hipóteses quanto à sensibilidade de diferentes investidores aos vazios de informação. Descobrimos que investidores diretos são mais sensíveis aos vazios de informação e bancos são menos sensíveis, enquanto os investidores de carteira são moderadamente sensíveis.
概要
信息空隙反映出一个国家投资环境公开获得信息的缺乏,并显示与制度空隙相关的信息问题。我们认为,外国投资者对基于他们自己的私人信息及他们迅速应对变化的灵活性的信息空隙的敏感度不一样。我们预测,外资银行将受信息空隙阻碍最小,因为他们有特权获得有关当地情况的私人信息和有迅速适应新信息的能力。证券投资者,虽然有当地私人信息获取严重受限的信息空隙阻碍,但能够快速响应新信息。外国直接投资者能适度地获取当地私人信息,但他们的无法迅速适应的能力带来处理信息空隙的问题。使用当地公共信息和三十个最大的新兴市场1994至2012年资金流的时间序列横截面的数据,我们发现我们对不同投资者信息空隙敏感性的假设获得初步支持。我们发现,直接投资者对信息空隙最敏感,银行最不敏感,而证券投资者则是中度敏感。
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Acknowledgements
Special thanks to our editor Mona Makhija for the editorial assistance she provided throughout the review process; three anonymous reviewers for valuable comments; participants at Harvard Business School/JIBS Paper Development Workshop (2015), University of Southern California’s Center for International Studies Faculty Workshop (2014), and International Political Economy Society Annual Meeting (2013) for helpful feedback; our frequent collaborator Noel P. Johnston for contributing important early ideas to the project; and the Institute of International Finance (IIF) and the Credendo Group for data use and permissions. The conclusions of this paper are the responsibility of the authors.
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Accepted by Mona Makhija, Area Editor, on 7 November 2016. This article has been with the authors for five revisions.
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Kingsley, A.F., Graham, B.A.T. The effects of information voids on capital flows in emerging markets. J Int Bus Stud 48, 324–343 (2017). https://doi.org/10.1057/s41267-016-0056-6
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DOI: https://doi.org/10.1057/s41267-016-0056-6