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Papers by Livia Chiţu


Abstract
We analyze persistence in patterns of bilateral financial investment using data on US investors’ holdings of foreign bonds. We document a “history effect” in which the pattern of holdings seven decades ago continues to influence holdings today. 10 to 15% of the cross-country variation in US investors’ foreign bond holdings is explained by holdings 70 years ago, plausibly reflecting fixed costs of market entry and exit. This effect is twice as large for bonds denominated in currencies other than the dollar, suggesting the existence of even higher fixed costs of initiating US foreign investment in currencies other than the dollar. Our findings point to history and path dependence as key sources of financial market segmentation. ....

France General , United States , European Central Bank , University Of Orl , International French , International Policy Analysis Division , Academy Of Economic , Research Analyst , Eu Neighbouring Region Division , Geopolitics Of International Currency Choice , Unicredit Tiriac Bank , Cooperation Division , Paris School Of Economics , First National Prize , International Relations , Eu Countries Division , University Of Toulouse , Paris School , Economics Banking , Economic Studies , Directorate General International , European Relations , European Central , Region Division , Directorate General Economics , Directorate General Payment Systems ,