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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page The Geography of Capital Flows: What We Can Learn from Benchmark Surveys of Foreign Equity Holdings
Francis E. Warnock; Molly Mason
2000-688  (December 2000, latest version April 2001)

Abstract:  To provide insight into the accuracy of U.S. data on international equity transactions, we compare estimates of U.S. holdings of equities in over 40 countries with actual holdings given by comprehensive U.S. benchmark surveys. If the rate of return used to revalue U.S. holdings in a given country is accurate, accurate holdings estimates imply accurate transactions data. For some countries, such as Canada and much of Latin America, the holdings estimates are quite accurate. For the majority of countries, however, there is a great disparity between our estimates and actual amounts, likely because U.S. data on international equity transactions record the country of the transactor, not the country of the issuer. Our estimates are far too high for financial centers--because many U.S. transactions that go through these countries involve securities issued in other countries--and far too low in most other countries, particularly in Europe and Asia. To illustrate the potential pitfalls of using estimated country-specific holdings data, we briefly present two cases in which the use of actual data leads to different conclusions. One case examines the determinants of U.S. equity holdings across countries; the other concerns the turnover rate of foreign equity portfolios.

Full paper, latest version (81 KB PDF)
Original version (90 KB PDF)

portfolio flows, international investment position, net foreign assets.

As Published Elsewhere
Emerging Markets Quarterly (forthcoming)

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