Abstract:

This paper presents a literature review of research on sovereign wealth funds (SWFs). We find that empirical studies focus on the impact of SWFs investments on target firms value and performance. Their results are not consistent. In the short term, the eventual studies conclude a predominantly positive response from the SWFs market. However, there is very little unanimity with respect to long-term effects of SWFs investments. Other researchers have tested the determinants of the investment choices of SWFs and find a preference for large foreign firms who confront financial difficulties, for strategic sectors, especially the financial sector. they conclude that political and cultural relations between SWFs countries and target firms countries play an important role in their investment choices and capital allocation strategies. We note the lack of studies testing the perception of the debt market about SWFs investments and we insist on the importance of considering the heterogeneity among SWFs and their governance characteristics.