What explains the size of Sovereign Wealth Funds? A panel analysis (2008–2018)

The objective of this study is to explicate the determinants that influence the size of Sovereign Wealth Funds (SWFs), with a particular focus on investigating the consequences arising from a country's engagement in a conflict. We exploit a panel of 28 SWFs for the period 2008–2018. In fact, of particular interest is the inverse correlation estimated between the size of SWFs and the participation of the originating country in armed conflicts. The quantitative reduction in the size of SWFs in the presence of an armed conflict has been estimated to range between 25 % and 37 %. One general finding is that the impact of financial market dynamics on the size of SWFs, while of comparable magnitude to the influence of the domestic economy, exhibits a greater degree of stability.