The determinants of U.S. portfolio equity and bond flows to Southeast Asian economies: A regional approach and countrywide approach

Date of Publication


Document Type

Master's Thesis

Degree Name

Master of Science in Economics

Subject Categories

International and Area Studies


School of Economics



Thesis Adviser

Cesar C. Rufino

Defense Panel Chair

Neriza M. Delfino

Defense Panel Member

Angelo A. Unite
Vivencio Dizon


There is an ongoing debate as to the potential causes of portfolio flows to developing countries during the 1990s. Some say the surge in portfolio flows is due to global factors while some consider country-specific factors to be more important. This paper tries to contribute to the current literature by investigating the potential determinants of U.S. portfolio equity and bond flows to Southeast Asian economies. It is noted that Southeast Asia received significant amount of portfolio capital from developed countries during the 1990s and is considered to be a major recipient of such flows in future years. By extracting a mixed number of global and country-specific variables and utilizing two approaches: 1) panel data estimation and 2) individual country time-series regression, the experiment yielded interesting results.The results of the panel data estimation indicate that the determinants of U.S. portfolio equity flows to Southeast Asia are global and country-specific factors. On the other hand, the determinant of U.S. portfolio bond flows to the region turned out to be a global factor. The results of the time-series regressions depict a mixed picture with different determinants per type of flow and per country. For Indonesia and Malaysia, global and country-specific factors are equally important in determining U.S. portfolio equity flows. In the case of the Philippines, global factors are more important in determining U.S. portfolio equity flows while its U.S. portfolio bond inflows are due to global and country-specific factors. Lastly, U.S. portfolio equity and bond flows to Thailand are both mainly caused by country specific effects.

It is surmised that the differences in the individual country results may be due to the differences in the level of financial openness or the level of capital market integration of the sample countries to the global market. It is also argued that countries that are significantly determined by global (as against country-specific ) factors have higher level of capital market integration. Among the reasons for the different levels of capital market integration are investment barriers (e.g. limited size of stock market, regulation, political events, taxes, etc.) A number of anecdotal evidence is noted to supplement this analysis.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

191 leaves ; 28 cm.


Determinants; Securities; Portfolio management; Equity; Bonds; Economies of scale

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