Globalization and the Geography of Capital Flows

The U.S. cross-border securities portfolio is used as a case study to document the extent of distortions in traditional residence-based portfolio statistics. With cross-border holdings of $12 trillion in stocks and bonds as of end-2017, the United States in aggregate is the single largest cross-border investor. Authors exploit the underlying security-level data on U.S. cross-border portfolio holdings collected as part of the Treasury International Capital (TIC) system. Using security-level identifiers as well as modern text matching techniques, authors map these holdings, security by security, to the country of exposure for each firm as assigned by commercial products designed for international investors, thus converting these holdings to a nationality basis. For common stock equity holdings, authors rely primarily on the constituent information for Morgan Stanley Capital International (MSCI) country-focused equity indexes, supplemented with information on the primary location of operations for firms that are not included in the MSCI indexes. For bonds, authors also rely on information about the ultimate parent company obtained from Moody's Investors Service, and, for asset-backed securities, about the underlying assets to map holdings of corporate bonds to a nationality basis. Each data file contains the market value by country of US holdings of long-term securities that are considered foreign on a residence basis as published in the Treasury International Capital data, and their corresponding values on a nationality basis, for end-December of each year.

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  "920:00"
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  "920:000"
]