Al-Ojayan: Treating the Oil Addiction in Kuwait – Proposals for Economic Reform

Abstract:

In 2015, for the first time in 16 years, Kuwait reported a fiscal deficit of 2.71 billion Kuwaiti Dinars ($9.4 billion). The deficit was exacerbated by weakness in crude prices and mounting supply–demand imbalances in the global oil market. It is critical that Kuwait reacts with a fiscal contingency plan to avoid the uncertainties and volatility of depending primarily on oil to fund government activities. This paper aims to highlight the current economic condition and fiscal needs of Kuwait, as well as to propose a set of potential mitigating strategies for the government to consider.

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Boubakri, Cosset & Grira: Sovereign Wealth Funds Investment Effects on Target Firms’ Competitors

Abstract:

We investigate the impact of sovereign wealth funds acquisitions (SWFs) on the performance of target firms’ competitors. We find a positive and significant impact of SWFs acquisitions on target firms’ competitors. This means that market participants anticipate value creation in the targets competitors, due to likely expected restructuring activities. Further analysis shows that relatively large rivals, low leveraged rivals, rivals with highly correlated returns with those of their corresponding targets, rivals in less competitive industries show higher abnormal returns upon the acquisition announcement. Our results question the rationality of protectionism as legal barriers to sovereign wealth funds cross-border investments.

 

Available for download here.