Is Democracy Profitable? a Study on Sovereign Wealth Funds
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Sovereign Wealth Funds (Swfs) Are Investment Portfolios Owned and Managed by Governments. However, It is Broadly Believed That Government Intervention Can Increase Risk and Worsen Moral Hazard Problems in the Finance Sector. This Paper Presents an Empirical Study on the Relation between the Level of Government Intervention (Proxied by Democracy and Economic Freedom) and the Rate of Return on Assets of Swfs for 17 States and Regions, and the Results Indicate That There is a Negative Correlation.
Sovereignwealth Funds; Swfs; Government Intervention; Economic Freedom