*SPECIAL ISSUE CALL FOR PAPERS: The evolving role of sovereign wealth
funds: issues and challenges*

A Special Issue to be published in the* Journal of International Business

*Special Issue Editors:*

*  Narjess Boubakri (Professor of Finance and Bank of Sharjah Chair in
Banking and Finance, School of Business Administration, American University
of Sharjah, American University of Sharjah, UAE)

*   Veljko Fotak (Associate Professor of Finance at the University at
Buffalo and a Fellow at the Sovereign Investment Lab at Bocconi University)

*  Omrane Guedhami (C. Russell Hill Professor and Professor of
International Finance, Moore School of Business, University of South

*  Yukihiro Yasuda (Professor of Graduate School of Business
Administration, Hitotsubashi University, Tokyo, Japan)

*Deadline for submission:* October 1, 2021

*Tentative publication date:* Fall 2022

*Significance of the Topic and Reasons for the Special Issue of JIBP*

The Sovereign Wealth Fund Institute defines a Sovereign Wealth Fund (SWF)
as “a state-owned investment fund or entity that is commonly established
from balance of payments surpluses, official foreign currency operations,
the proceeds of privatizations, governmental transfer payments, fiscal
surpluses, and/or receipts resulting from resource exports.” SWFs invest
worldwide in a myriad of asset classes (stocks, Treasury bonds, etc.) and
sectors (financial, real estate and infrastructure, power generation,
sports, commodities, airlines, manufacturing, etc.). Because of their rapid
growth and sheer scale (by June 2018, SWFs had accumulated $7.8 trillion of
assets under management, from $3.3 trillion in 2004, according to data from
the Sovereign Wealth Fund Institute), SWFs have attracted substantial
interest from academics, practitioners, politicians, media, and the public
at large. Notably, Google News reports 632,000 news items related to SWFs
in the first nine months of 2020.

While the explicit goals and objectives of individual SWFs differ, most
have a mandate to preserve wealth from limited natural resources for future
generations. At the same time, SWFs aim to diversify revenue streams of
countries tied to natural resources by investing in unrelated industries,
generally outside their domestic borders. In this form, SWFs have been
around for more than 50 years, but first came to the attention of Western
audiences about a decade and a half ago. The global financial crisis (GFC)
brought their aggressive acquisition sprees to light, as well as their role
as liquidity providers to failing financial and non-financial firms. The
renewed attention has revealed their deep impact on foreign markets and the
domestic economies from which they originate. Virtually all countries have
been affected by SWF investments, both directly and indirectly.

However, today, SWFs face a perfect storm, with a confluence of
challenges. First,
collapsing oil prices have dramatically slowed the pace of asset
accumulation that helped them rise to prominence. At the same time, a world
with greater trade restrictions and tighter borders (Evenett, 2019) implies
lower global currency imbalances. This further depletes the main sources of
asset accumulation for currency reserve-based funds. The size of SWF
portfolios has also shrunk due to huge losses, as SWFs were forced to
liquidate parts of their portfolios at fire-sale prices in order to support
domestic economies. To compound these trends that imperil the long-term
survival of funds, recent corruption scandals have embroiled funds from the
Korea Investment Corporation (KIC) to the Malaysian State Fund 1MBD and
even the Norwegian Pension Fund Global, widely seen as the best-governed

What has emerged is the need for a fundamental governance overhaul,
including a more explicit definition of the main objective of each fund,
highlighted by the need to set priorities among wealth preservation,
revenue diversification, economic development, and fiscal stabilization. In
the midst of these challenges, we question whether we should anticipate an
end to the golden age of SWFs, or the beginning of a new trend, one in
which SWFs redefine their main role away from simple wealth preservation to
helping domestic economies diversify from hydrocarbons.

In the midst of the economic carnage from the coronavirus pandemic, slower
global economic growth, and a steep rise in protectionism, SWFs are, more
than ever, expected to dedicate large amounts to domestic investments
(Cuervo-Cazurra, 2018). This pressure, together with more uncertain sources
of revenues to these funds, is putting them under the spotlight of
academicians and politicians alike (Grira, 2019; Megginson & Fotak, 2020;
Megginson & Gao, 2020). The bailout programs that resulted from the GFC
also underlined the phenomenon of “capitalist states,” as governments began
keeping pace with acquisitions worldwide (e.g., Kotter & Lel, 2011;
Megginson & Fotak, 2015; Park, Xu, In, & Ji, 2018). This topic is likely to
attract even greater interest in the near future, given the unprecedented
level of government interventions in support of economies all over the
globe during the current pandemic.

The number of SWFs and their assets (foreign and domestic) under management
has grown continuously in both developed and developing countries, across
all continents. A 2016 report by PWC, entitled “Sovereign investors 2020: A
growing force,” identifies SWFs as inevitably major players in global
markets in the years to come. However, because these funds have become
engulfed in the unprecedented worldwide crisis resulting from the COVID-19
pandemic, we have yet to fully understand them, their motivations
(Calluzzo, Dong, & Godsell, 2017; Carney, 2018), asset allocation, overall
behavior and strategy, firm impact (Aguilera, Capapé, & Santiso, 2016;
Boubaker, Boubakri, Grira, & Guizani, 2018) and economy-level impact
(Karolyi & Liao, 2017; Megginson & Gao, 2020). In a recent review of the
literature on SWFs, Fotak, Gao, & Megginson (2017) note that “extant
research has failed to provide answers to some of the most fundamental, and
most important, questions surrounding SWFs. Foremost is the question
whether SWFs can truly become vehicles financing economic development, to
the benefit of the populations of the sponsoring countries.” This is a
legitimate question given the current situation.

For this Special Issue, we invite high-quality theoretical and empirical
research that develops a better understanding of SWFs, their objectives,
level of activism, and effects, within a globalization framework “central
to the field of international business” (Lundan, 2018). Most importantly,
we are focused on “forward-looking” research that will analyze past trends
and events to sharpen our understanding of the evolving future role of
SWFs. We believe the topic of SWFs remains integral to the understanding of
international business, because of 1) the scale of the funds, 2) their
fundamental role in providing a release valve to global imbalances in trade
and financial flows, and 3) core issues embedded in their existence that
touch upon the impact of cross-border financial flows on domestic firms and
markets, as well as the political economy considerations that are
inevitably linked to the sovereign nature of these funds.

To this end, we are interested in papers that employ rich new datasets, and
exploit exogenous shocks to the economy to investigate the evolution of
SWFs. The following are some select, non-comprehensive, examples of
possible research topics:

1.     The evolution of SWFs over time: Given current COVID-related fiscal
shocks, will SWFs increase their domestic asset allocations? If so, could
this lead to instability in foreign (mostly Western) markets as they divest
abroad? How does an SWF retrenchment affect foreign firms in which they own

2.     How can we distinguish between the political and financial/economic
objectives of SWFs? Specifically, are SWFs based in autocratic countries
more resilient to pressures to retreat domestically? For example, Norway is
increasing domestic dividend distributions, but the Public Investment Fund
of Saudi Arabia (PIF) is going on a shopping spree, completely oblivious to
the domestic fiscal crisis. Is PIF an isolated case, or do non-democratic
SWFs have an advantage when it comes to their ability to buy assets cheaply
during a downturn?

3.     Anecdotal evidence suggests that SWFs outperformed over the
2008-2010 period with financial sector investments. What was their impact

4.     How can SWFs adjust their asset allocation strategies to minimize
the impact of revenue reduction, for example, following the oil price
collapse this year?

5.     Recent trends have seen SWFs enter novel markets. In particular, we
note an increase in corporate lending, infrastructure, and, most notably,
early-stage investing. SWFs are increasingly playing a role in
government-sponsored venture capital incubators. Are these part of an
attempt to diversify revenue streams, or are they representative of
long-term trends that will shape the future of SWFs?

6.     We observe increasing reports of SWF lending directly to firms. How
do SWF loans compare to private sector loans? Do these loans lead to a
previously unexplored channel of influence?

7.     What role do SWFs play in infrastructure financing? Are they in a
position to make up for private sector shortfalls?

Submission Process

Papers for the special issue should be submitted at For information or questions about
the Special Issue, please contact us at [log in to unmask],
using the subject heading: “SI and Conference on SWFs.”

There will be a one-day academic conference on the topic to be co-organized
by the Moore School of Business, University of South Carolina and Graduate
School of Business Administration, Hitotsubashi University in Tokyo, Japan,
on February 25, 2022. The conference will provide an opportunity for
authors whose works are invited for resubmission to the JIBP Special Issue
on “Sovereign Wealth Funds and Capitalist States: Issues and Challenges” to
develop their papers to meet JIBP high-quality standards. Renowned scholars
working on this topic have confirmed their attendance at the workshop and
will serve as discussants. The time allocated to each paper is 25 minutes
for the presenter, 20 minutes for the discussant, and 10 minutes for the

The conference will include a keynote speech by Professor William
Megginson, who is Professor and Price Chair in Finance at the University of
Oklahoma’s Michael F. Price College of Business.

*Important Deadlines*

JIBP general submission deadline: October 1, 2021

Publication of Special Issue: Fall 2022


Aguilera, R. V., Capapé, J., & Santiso, J. 2016. Sovereign wealth funds: A
strategic governance view. *Academy of Management Perspectives*, 30(1):

Boubaker, S., Boubakri, N., Grira, J., & Guizani, A. 2018. Sovereign wealth
funds and equity pricing: Evidence from implied cost of equity of publicly
traded targets. *Journal of Corporate Finance*, 53: 202–224.

Calluzzo, P., Dong, G. N., & Godsell, D. 2017. Sovereign wealth fund
investments and the US political process. *Journal of International
Business Studies*, 48(2): 222–243.
Carney, R.W. 2018. *Authoritarian capitalism: Sovereign wealth funds and
state-owned enterprises in East Asia and beyond*. Cambridge: Cambridge
University Press.

Cuervo-Cazurra, A. 2018. Thanks but no thanks: State-owned multinationals
from emerging markets and host country policies. *Journal of International
Business Policy*, 1: 128–156.

Evenett, S. J. 2019. Protectionism, state discrimination, and international
business since the onset of the Global Financial Crisis. *Journal of
International Business Policy*, 2(1): 9–36.

Fotak, V., Gao, X., & Megginson, W. L. 2017. A financial force to be
reckoned with? An overview of sovereign wealth funds. *The Oxford Handbook
of Sovereign Wealth Funds*, 16.

Grira, J. 2019. Back to government ownership: The Sovereign Wealth Funds
phenomenon. *Finance Research Letters*, forthcoming.

Lundan, S. M. 2018. From the editor: Engaging international business
scholars with public policy issues. *Journal of International Business
Policy*, 1: 1–11.

Karolyi, A., & Liao, R. 2017. State capitalism's global reach: Evidence
from foreign acquisitions by state-owned companies. *Journal of Corporate
Finance*, 42: 367–391.

Kotter, J., & Lel, U. 2011. Friends or foes? Target selection decisions of
sovereign wealth funds and their consequences. *Journal of Financial
Economics*, 101(2): 360–381.

Megginson, W. L., & Fotak, V. 2015. Rise of the fiduciary state: A survey
of Sovereign Wealth Fund research. *Journal of Economic **Surveys*, 29(4):

Megginson, W. L., & Fotak, V. 2020. Government equity investments in
coronavirus rescues: Why, how, when? SSRN Electronic
Journal, 10.2139/ssrn.3561282.

Megginson, W.L., & Gao, X. 2020. The state of research on sovereign wealth
funds. *Global Finance Journal*, 44, 100466.

Park, R. J., Xu, S., In, F., & Ji, P. I. 2019. The long-term impact of
sovereign wealth fund investments, *Journal of Financial Markets*, 45:

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