Template-Type: ReDIF-Paper 1.0
Title: Bilateral Trade, Openness and Asset Holdings
Author-Name: Alexandra Peter
Author-Email: alexandra.peter@uni-bonn.de
Classification-JEL: F10, F30, F41
Keywords: International Portfolio Holdings, Bilateral Trade Flows, Trade Openness
Abstract: 	This paper analyzes the relationship between bilateral trade flows, 
	trade openness, and asset holdings in a three-country stochastic general 
	equilibrium model. The threecountry model set-up enables me to disentangle 
	and separate the effects bilateral trade flows and trade openness have on 
	bilateral portfolio patterns. I find that both factors independently influence
	bilateral asset holdings. Higher bilateral trade as well as higher trade openness
	lead to a higher bilateral foreign asset position. Furthermore, the two factors 
	show an interaction effect, where increasing trade openness diminishes the influence
	of bilateral trade flows on asset holdings. I provide supporting empirical evidence 
	for these theoretical findings using a data set on the geographical composition of 
	international portfolio holdings. 
Note: 
Length: 26
Creation-Date: 2010-12
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse21_2010.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse21_2010