Two-Way Securities Investments and Macro Financial Risks:Effects and Mechanisms
The two-way opening-up of the financial market is the only path to becoming a financial power.To promote the high-level opening of the financial industry,it is necessary to as-sess the macro financial risks of both foreign portfolio investment(FPI)and overseas portfolio in-vestment(OPI).Using quarterly data from 20 emerging economies between 2000 and 2020,this study investigated the impact of two-way securities investments on macro financial risk and the mechanisms behind their effect.The results showed that FPI increased macro financial risks in e-merging economies over the short term and reduced risk over the long term.OPI,however,was found to have no impact on macro financial risk in either the short or long term.Heterogeneity a-nalysis found that,compared to debt capital,equity capital had a stronger risk effect,while large-scale FPI had a stronger risk effect than small-scale FPI.From the perspective of economic sec-tors,the long-and short-term risk effects applied to the corporate and government sectors,FPI curbed default risk in the financial sector,while the household sector was insensitive.Mechanism analysis revealed that FPI increased macro financial risk in the short term by promoting the ex-pansion of the domestic credit scale and reduced risk in the long term by enhancing the liquidity of the domestic financial market.The findings serve as a reference for emerging economies to pre-vent and control financial risk and for China to become a high-quality financial power.
万方数据
维普
