Where Do “Impatient” Mutual Funds Invest? A Special Attraction for Large Proximate Markets and Companies with Strategic Investors

Abstract

Our study examines the investment determinants of worldwide mutual funds from the perspective of economic geography. In particular, we investigate the local prefe-rences of " impatient " mutual funds for specific countries. By analyzing a sample of 22,996 worldwide mutual funds over the period from 2005 to 2009, we demonstrate that impatient mutual funds are favorable to 1) large stock markets, 2) markets with a high level of protection for shareholders, 3) markets with familiar institutional practices, and 4) markets dominated by the presence of " strategic " investors as main shareholders of large listed companies.