Investment Survey Research Articles

Costa Rica: Technical Assistance Report-The Coordinated Direct Investment Survey and the Coordinated Portfolio Investment Survey (March 6-14, 2014)

This Technical Assistance Report discusses the findings and recommendations made by the IMF mission about the Coordinated Direct Investment Survey and Coordinated Portfolio Investment Survey in Costa Rica. It was observed that the practices followed to prepare external statistics employed adequate data collection instruments and appropriate methodologies. The mission stresses the importance of defining and implementing, in the short term, a work program to convert the complete balance of payments and International Investment Position historical series using the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) presentation. The conversion of time series to BPM6 should be accompanied by a methodological note explaining the characteristics of the new series and specifying which data were estimated in accordance with the new classification.

El Salvador: Technical Assistance Report-The Coordinated Direct Investment Survey and the Coordinated Portfolio Investment Survey (April 21-29, 2014)

El Salvador: Technical Assistance Report-The Coordinated Direct Investment Survey and the Coordinated Portfolio Investment Survey (April 21-29, 2014)

Risk perception of Retail Investors towards Mutual funds: A Survey of small investors

Mutual funds have gained immense popularity in recent years as a means of investment and understanding how small retail investors perceive the risks associated with these funds is essential to enable them to make informed decisions. The study indicates that small retail investors perceive mutual funds as a relatively safe and easy investment option. However, they are also aware of the risks associated with mutual funds, such as market volatility, economic uncertainty, and fund managers' performance. Furthermore, small retail investors perceive the risks differently based on their investment experience, age, education, and investment goals. The research aims to determine the elements that impact how small investors perceive risk toward mutual funds & understand the impact of these perceptions on their investment decisions. The study's results will be useful for mutual fund managers, financial advisors, and policymakers in designing investment products and strategies that are better suited to small investors' risk perception and investment behavior.

What Drives Aggregate Investment?: Evidence from German Survey Data

The ifo Investment Survey asks firms in the German manufacturing sector about the importance of sales, technological factors, finance, return expectations, and macroeconomic policy for their investment activity in a given year. We show that these subjective investment determinants 1) capture economically what their labels suggest, and 2) have strong explanatory power for aggregate manufacturing investment growth fluctuations. In a second step, we use these determinants to identify aggregate demand and aggregate technology shocks and argue that the bulk of the variance of both aggregate manufacturing investment and output growth fluctuations (as much as approximately two thirds in both cases) is explained by aggregate demand shocks. Consistent with neoclassical views, however, technological factors are the most important investment determinant on average.

Coming Home

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Prevailing Behavioral Biases and Investor Profiles: A Survey of Professional Investors

This article analyzes the relevance of behavioral finance in the functioning of financial markets. Using the empirical evidence from four surveys of professional investors with an average of 92 respondents, the authors aim to enhance the structure and systematization in the field. They first study the awareness of and level of education in behavioral finance, determining a clear gap of learning experience for professional investors. They also analyze the main cognitive and emotional biases, identifying representativeness, loss aversion, and herding as the most relevant ones in the decision-making process. Moreover, the authors evaluate the prevalence of under- and overreaction through several financial scenarios and the lack of ability to anticipate the market. Finally, they classify professional investors through their investment profile, applying the BB&K five-way model. They identify overconfidence as being a predominant bias affecting investors and find a clear disconnect between investors and their clients.

Small area estimation of proportions under a spatial dependent aggregated level random effects model

ABSTRACTThis paper describes small area estimation (SAE) of proportions under a spatial dependent generalized linear mixed model using aggregated level data. The SAE is also applied to produce reliable district level estimates and mapping of incidence of indebtedness in the State of Uttar Pradesh in India using debt and investment survey data collected by National Sample Survey Office (NSSO) and the secondary data from the Census. The results show a significant improvement in precision of model-based estimates generated by SAE as compared to direct estimates. The estimates generated by incorporating spatial information are more efficient than the one generated by ignoring this information.

Where do the advanced countries invest? An investigation of capital flows from advanced countries to emerging economies

This paper examines determinants of foreign portfolio investment (FPI) from the developed countries to emerging economies using the new data from the IMF’s large coordinated portfolio investment surveys. Employing an assortment of econometric techniques, we attempt to shed further light on the determinants bilateral FPI capital flows with a number of contributions to the current literature. This paper advances other previous study by utilizing the new disaggregated FPI capital flows and a number of broad differentials. We find that portfolio investors from G7 countries tend to depart from efficient portfolio allocation and they are biased towards some differentials between source and recipient countries.

Surprise, surprise – Measuring firm-level investment innovations

Using the IFO Investment Survey for the German manufacturing sector, we construct a forty-year panel of firm-level investment innovations (surprises). We document the cross-sectional and time-series properties of this panel, and our main findings are: the cross-sectional dispersion of investment surprises is countercyclical, as is their average within-firm time series volatility, and both are highly correlated. This justifies, in part, strategies in the literature to use cross-sectional moments for the calibration of heteroscedasticity. At the same time, the cross-sectional dispersion of investment is procyclical, suggesting a nonsmooth capital adjustment friction at the micro level. There is substantial dispersion in within-firm volatility, a feature consistent with a recent literature on information frictions at the firm-level. Finally, the aforementioned second moments of investment innovations are Granger-caused by recessions, but not vice versa, rendering simple exogenous uncertainty shocks less plausible as drivers of business cycles.

Financial Literacy, Financial Knowledge Calibration, and Financial Consumer Protection: Lessons Learned from Mutual Fund Investor Survey

2008-2009 글로벌 금융위기 이후 금융소비자보호를 위한 제도적 개입의 이론적 논제는 금융소비자의 정보적 비대칭성, 거래상 교섭력 약화, 제한된 합리성 등으로 압축된다. 이 가운데 최근 금융소비자 이해력(financial literacy)을 높이기 위한 정책적 배려와 교육적 개입이 크게 강화되고 있으며 여러 연구에서는 금융이해력의 측정과 평가를 기반으로 금융교육 및 정보제공의 제도설계와 정책 인프라 고도화를 위한 제언에 힘을 쏟고 있다. 본 연구에서는 금융이해력의 이론적 평가척도이자 실증적 준거점인 금융지식의 주관적 측정과 객관적 측정 간 격차를 지식보정(knowledge calibration) 이론체계를 통해 살펴보고자 한다. 즉, 금융소비자 개인의 주관적 지식과 객관적 지식의 차이로부터 나타나는 편향적 인식을 파악하고, 이러한 지식(오)보정 상태가 투자에 대한 기대와 실제 투자행동에 어떻게 연관되어 있는지 도출해보고자 한다. 이를 위해 본 연구에서는 2015년도 한국금융투자자보호재단의 펀드투자자 설문조사를 활용하여, 펀드시장에 참여하는 금융소비자의 주관적 지식과 객관적 지식의 일치도 여부 및 이에 따른 유형화 분석을 수행하였으며 인구통계학적 요인, 기대수익률과 실제 투자성과, 금융교육 및 금융전문가 자문 경험 간의 관계성을 고찰하였다. 연구결과 우리나라 펀드시장의 금융소비자 대부분은 주관적 지식보다 객관적 지식이 높은 과소자신감 집단이나 이 두 가지 지식수준이 모두 저하된 집단에 속하는 것으로 나타났으며, 연령과 가구소득이 이러한 투자세분화 변수로서 유의미한 것으로 나타났다. 또한 객관적 지식보다 주관적 지식이 상대적으로 높은 과잉자신감 집단의 투자자는 전체적으로 그렇게 큰 비율은 차지하지 않았지만 주로 젊은 계층에서, 가구 소득이 높은 계층에서 두드러지는 것으로 나타났다. 또한 과잉자신감 집단의 경우 다른 집단과 비교하여 기대수익률은 높지만 상대적으로 실질적인 투자성과나 투자 서비스만족도는 기대수익률 만큼 충족되는 것은 아니었다. 끝으로 지식보정 개념으로 세분화된 금융소비자의 경우 기존 연구와는 다르게 과잉자신감 성향의 펀드투자자들이 금융교육과 금융전문가 자문과 같은 외부 정보원을 통한 정보탐색 행위가 많은 것으로 나타났다. 종합하여 금융소비자에 대한 미시적 분석을 토대로 본 연구에서는 금융시장을 구성하는 핵심 이해관계자로서 금융소비자, 금융당국, 금융회사 간 정보적 대칭성과 거래의 균형성을 제고하고 금융소비자 개인의 제한된 합리성을 교정하기 위한 전략을 논의하였고, 이를 통해 지속가능성과 투명성 높은 금융시장을 구축하기 위한 제도적 시사점을 제시하였다.

Financial overconfidence over time: Foresight, hindsight, and insight of investors

Overconfidence is among the most popular psychological explanations for investing behavior of private households. It has been linked to portfolio turnover, diversification, and risk taking, with mostly negative consequences for investors. In a panel survey of self-directed investors, who own an online brokerage account at a UK bank, we ask for stock market and portfolio expectations and derive several overconfidence measures from the responses. We find that in general overconfidence is present in our sample. We then match the survey data with investors' actual transactions and portfolio holdings, and find an influence of overplacement on trading activity, of overprecision and overestimation on degree of diversification, and of overprecision and overplacement on risk taking. Overconfidence hereby leads to increased trading activity, higher risk taking, and less diversification. We explore the evolution of overconfidence over time and identify a role of past success and hindsight on subsequent degree of overconfidence.

Swedish-Norwegian tradable green certificates: Scheme design flaws and perceived investment barriers

The EU Commission recommends using market-based support schemes for renewable-electricity projects. One example is the Swedish-Norwegian tradable green certificate scheme. We examine whether design features in the Norwegian part of this scheme, specifically, the scheme's short duration and the way it is to be abruptly terminated, contribute to investors' perceptions of barriers. We apply econometric techniques on primary data collected in two surveys of Norwegian investors in hydropower, and we use real options theory to predict and interpret investors' responses. We show that: (1) immediately after the scheme was introduced, investors are eager to lock in future subsidies by investing immediately and concerned with factors that may delay the completion of their projects; (2) as the certificate deadline neared, investors have become increasingly pessimistic and concerned with economic and risk barriers. Investors in big hydropower plants with regulation reservoirs are particularly concerned with the risk of not completing their projects in time to gain the right to sell certificates. These findings are consistent with the predicted responses to the scheme design derived from real options theory. In contrast to earlier studies, we find no difference in responses to the scheme design across investor types.

Foreign Holders of Italian Government Debt Securities: New Evidence

Drawing on data from the Eurosystem’s recent Securities Holdings Statistics (SHS) and the IMF’s Coordinated Portfolio Investment Survey (CPIS), the paper provides a detailed breakdown of foreign holders of Italian government securities by sector and geographical area. We estimate that euro-area investors held more than 60 per cent of the Italian general government securities held by non-residents at the end of 2015; the sector in the euro area holding the largest share was ‘other financial intermediaries’ (predominantly non-money market funds), followed by banks and the insurance industry and pension funds. We also show that foreign demand for Italian government debt was mainly driven by euro-area countries in 2014, while in 2015 it mostly reflected purchases made by investors outside the euro area.

Asymmetries in the Coordinated Direct Investment Survey: What Lies Behind?

This paper analyzes asymmetries in direct investment positions reported in the Coordinated Direct Investment Survey (CDIS) following a top down approach. First, it examines asymmetries at global level; second, it examines asymmetries between CDIS reported and derived data for individual economies; and third, the paper analyzes data at bilateral economy level. Then, the paper explores seven main reasons for asymmetries, including those arising even when economies follow international standards. Finally, the paper includes a section on addressing bilateral asymmetries and concludes with specific planned actions to reduce asymmetries, including initiatives led by international organizations.

Profitability of bioethanol production: the case of Ethiopia

This research investigates the profitability of bioethanol production in Africa, taking Ethiopia as a case in point, and suggests an oil price threshold beyond which biofuels may be profitable. Specifically, the study analyzes the viability of producing bioethanol from molasses in the context of Ethiopia, using data from a biofuels investment survey by EEPFE/EDRI in 2010. We draw on investment theory as our underlying conceptual framework and we employ unit cost analysis for our empirical analysis. Findings reveal that bioethanol production (from molasses) in Africa/Ethiopia can be quite viable and the biofuels industry can be viewed as a way out of poverty. This is a case study involving a few observations because of the small size of the universe of producers studied; hence the need for further analysis as the sector expands.Key words: profitability; bioethanol; oil price threshold; Ethiopia; AfricaJEL Codes: Q56, Q42

Forex jako alternatywa dla rynku kapitałowego

Purpose – presentation of significant characteristics of forex market from investor’s point of view, indication of differences between investing on the capital market and the forex market,as well as comparison between the profile of a Polish investor and trader. Design/methodology/approach – indispensable analyses and inferences were conducted based on data and information drawn from literature of the subject, publications and statistics of Polish Financial Supervision Authority and Warsaw Stock Exchange, results of Nationwide Investor Survey, market reports, currency brokers’ portals, the present author’s own experience. The research was conducted by means of desk research method, deductive inference and statistical analysis. Findings – there are significant differences between a stock market investor and a trader. The biggest problem connected with forex market investments, which determines a relatively low percentage of the earning persons, is improper management of the amount of loss as well as profit and loss ratio. In contrast with the capital market, on the forex market the choice of instrument and the moment of entering have less significance than proper management of profit/loss indicator. Originality/value – the matrix of theoretical rate of return depending on risk/reward ratio, stop loss amount and efficiency on the forex market.

The demand for foreign workers by foreign firms: evidence from Africa

Foreign workers play a crucial role in channelling resources and information flows both within the boundaries of firms and between foreign firms and the host country economy. In this study we employ a novel firm-level database (UNIDO Africa Investor Survey 2010) in order to investigate the factors that determine the employment of foreign workers by foreign firms in Sub-Saharan African countries. We shed light on important firm-level as well as host–home country characteristics which shape the demand of foreign workers in developing countries. We show that differences between investors are largely explained by the role played by economic and institutional distance between home–host countries as well as by firm-level heterogeneity in the degrees of knowledge intensity and local embeddedness.

Social and asocial learning about climate change among institutional investors: lessons for stranded assets

ABSTRACTInstitutional investment portfolios are currently, and will increasingly be, affected by the risks and opportunities resulting from climate change. This paper contributes new empirical data from 58 in-depth interviews and a global investor survey to explore how climate change is being learnt socially and asocially within the institutional investment industry. This research seeks to identify ways in which the relatively novel concept of ‘stranded assets’ can be better disseminated to investment professionals. Importantly, both social and asocial learning can affect investment decisions, with some actors usefully providing information via both channels. Better learning, language and leadership within the institutional investment system could facilitate the dissemination of climate and stranded asset discourses among investors, but an imperative to communicate effectively rather than simply communicating more is noted. This paper should interest both investment professionals keen to learn more about the issue and academic researchers seeking to engage investors on these topics.

Corporate share repurchases in the UK

Purpose The purpose of this paper is to examine motivations underlying UK repurchase activity. Specifically, the paper inquires into the relevance of a range of different explanations for repurchases and perceptions of regulation surrounding them. Emphasis of the paper is, however, on motives linked specifically to repurchases rather than income distribution, more generally. Design/methodology/approach The study uses a survey approach to capture the views on repurchases of corporate managers and investors. It supplements the survey data with secondary information about the companies to better understand repurchase behaviour. Findings Results indicate that repurchase use is influenced by motives linked specifically to this tool rather than those associated with income distribution, more generally. In particular, repurchases are used to return surplus cash to investors, signal undervaluation and influence gearing and earnings per share levels. In the latter case, companies appear to use repurchases to perform a value added role, alongside manipulating the EPS level and thus the latter may simply be a by-product of the former. Private investors may nevertheless be vulnerable to such manipulation, given their limited financial literacy. Research limitations/implications The study relied on a survey of managers and investors and univariate analysis. In the former case, respondent numbers, particularly for the investor community were low, raising questions as to the generalisability of the data. In the latter, the results may be mis-stated owing to the simplicity of the analysis. Practical implications Overall, the survey results suggest that firms use repurchase programmes in different contexts to dividend payments and in appropriate circumstances. While managers and investors broadly share similar views, private shareholders may be in a vulnerable position given their limited financial literacy. Originality/value This is the first UK study on repurchases that examines the relative importance of a range of motives underlying repurchases. Moreover, it assesses in detail the core hypotheses that are linked specifically to repurchase programmes to better understand UK repurchase behaviour. It does so by supplementing the survey data with additional company information and comparing the views of the different audiences surveyed.

Half a century of research on Value Line: a comprehensive review

Purpose – The purpose of this paper is to present a comprehensive review of literature on Value Line. First, the authors summarize the literature examining the Value Line enigma. Second, the authors survey the literature on Value Line’s other valuation metrics. Finally, literature comparing Value Line’s database to other tradition data sources is presented. Design/methodology/approach – Approximately 60 academic articles published from 1967 to 2015 on Value Line are systematically reviewed and analyzed. Findings – Despite extensive research, empirical evidence on the Value Line enigma remains less than conclusive. Empirical evidence suggests that Value Line’s other metrics are useful and efficacious. In terms of forecast accuracy and consistency, evidence seems to suggest that Value Line Investment Survey database is as good as other databases. Originality/value – Academic research on Value Line began over half a century ago and is extensive; however, a comprehensive review of previous work is non-existent. This paper fills that gap in the literature and presents a comprehensive review of academic literature on Value Line.