Skip to main content

Risk sharing from international factor income: explaining cross-country differences

Buy Article:

$55.00 plus tax (Refund Policy)


Access to world capital markets and net investment income flows between countries help protect national income from country-specific output shocks. I empirically study what factors explain cross-country differences in the extent of risk sharing from international factor income. An index of investor protection is the leading causal variable for the estimated amount of risk sharing over the 1985 to 2004 period. Improving investor protection in Russia to Denmark's level implies five times larger risk sharing compared to the sample average. These results indicate one possible way to reap large potential benefits from international risk sharing.

Keywords: F36; G15; O17; diversification; international financial integration; investor protection; risk sharing

Document Type: Research Article


Affiliations: Erasmus University Rotterdam, Tinbergen Institute and ERIM,Burg. Oudlaan 50, Room H14-30, 3062 PA Rotterdam, The Netherlands

Publication date: 2013-04-01

More about this publication?
  • Access Key
  • Free ContentFree content
  • Partial Free ContentPartial Free content
  • New ContentNew content
  • Open Access ContentOpen access content
  • Partial Open Access ContentPartial Open access content
  • Subscribed ContentSubscribed content
  • Partial Subscribed ContentPartial Subscribed content
  • Free Trial ContentFree trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more