April M. Knill, Bong-Soo Lee and Nathan Mauck have a new paper up on SSRN entitled, “Bilateral Political Relations and the Impact of Sovereign Wealth Fund Investment: A Study of Causality.”
The authors find that political relations play a role in SWF decision-making:
“We find, counter to predictions based on the trade and political relations literature, that SWFs prefer to invest in nations with which they have relative weaker political relations. This indicates that SWFs behave differently than other economic agents.”
It’ll be interesting to see if the analysis stands up to peer review, as the above is rather provocative.
Hmm,this might improve with a few years of cellaring..