International Capital Flows: An empirical study of the relationship between equity and debt investments

Sahoo, Ganeswar (2010): International Capital Flows: An empirical study of the relationship between equity and debt investments.

Abstract

Capital flows in today’s arena is a hot topic attracting many researchers to do some contributions. International capital flows are rapidly increasing day by day with huge increases in volume of trade in equity and debt markets. This piece of work is an effort and a kind of approach in finding out the cross relationship between equity and debt investments in capital markets and the investor’s portfolio decisions between equity and debt investments in international financial markets. In this paper, I have studied intensively world equity market, world debt and bond market. The relationship between equity and debt investment has been computed using statistical methods like covariance and correlation with linear regression analysis with US market data of past 200 years. I examine the relationship between equity and debt and reach with a conclusion that there is an inverse relationship between equity and debt investment.

• Item Type: MPRA Paper
• Language: English
• Keywords: International Capital Flows, Debt and Equity Investment, International financial markets.
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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