Sovereign Wealth Funds and Wealth Renationalization: Political Determinants of Investment Decisions

This research is focused on the sphere of political economy of Sovereign Wealth Funds (SWFs) being the institutions of both economic and political nature. The novelty of the research is associated with the incorporation of political factors into the analysis. The research is based on the data collecting the information about SWFs’ asset transactions. To show the political patterns in SWFs’ functioning, logistic regression analysis is applied to the data. Adding the level of democracy as the independent variable, the analysis explains a certain level of variation among SWFs’ performance. We found a non-linear relationship between the level of democracy in the country and the probability of investing into foreign assets by SWFs. The highest probability of investig abroad is appropriate to the most democratic and most autocratic regimes, while lower probability is associated with lower levels of democracy and autoritarianism. The results of the study contribute to our understanding the quality of wealth management in different political regimes.