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BIt Notes 18

International portfolio equity investments: what about Italy?

Alessandra Franzosi, Manuela Geranio

November 2007

Abstract

Financial markets globalisation implies that the competitiveness of a country has to be judged taking into account its capability of attracting resources through the capital market. The paper tries to quantify this phenomenon using CPIS data, that is the Coordinated Portfolio Investment Survey made by IMF, also locating major liquidity pools worldwide for portfolio investments. It shows Italy’s relative positioning concluding that, referring to equity investments, Italy is characterized by a good propensity in investing abroad combined with a lower capability in attracting resources coming from other countries.

As a result, Italy is at global level a net exporter of resources for equity investments. Institutional investors play a crucial role in defining international diversification of Italian financial assets. Likewise, Italian lower attractiveness arises from a minor propensity of the United States – the major World exporter of resources – in investing in Italy.

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