Sovereign Wealth Funds and Corporate Investments: Evidence from Norway Sovereign Wealth Fund target firms
DOI:
https://doi.org/10.31305/rrijm.2023.v08.n10.008Keywords:
SWF ownership, Corporate Investments, Norway Sovereign wealth fund, IndiaAbstract
Using a sample of 105 Indian firms acquired by the Norwegian Sovereign Wealth Funds, we investigate whether Sovereign Wealth Fund investments affect the corporate investments of firms., particularly, whether Norway sovereign wealth fund serves as a disciplinary mechanism in reducing the mangers opportunistic behavior. Our findings reveal that Norway Sovereign Wealth Fund ownership and size reduce corporate investments, supporting the political agenda hypothesis, suggesting that the firm must decide on taking large ownership stakes of Norway Sovereign wealth funds ownership to attenuate mangers opportunism behavior and political agendas. Our findings are robust to an alternative measure of sovereign wealth funds and endogeneity concerns.
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