Assessing the impact of pension institutions on the development of global finance

Abstract

The novelty of the research lies in the conception of pension institutions as correctors of global financial development. These institutes do not only stimulate, but also slow down the positive change due to the particular assets allocation by largest pools, which are in fact represent a concentration of risks. This issue has not been taken under any comprehensive consideration at the global level yet. Thus, the aim of the research is to assess the pension institutions impact on long-term global financial development. The research concerns various problems: from specifying the position of pension institutions within the global finance hierarchy and “clusters of influence” allocation to empiric assessment of their impact on multiple indicators of global financial development; conclusions and prospects are formulated in the article as well. The article shows that pension institutions are the largest global investors with the core of the USA pension funds’ assets concentrated in the domestic stock market. The paper outlines the ways of the slowdown in the global financial development through to the pension funds in case of market and country risk realization.

Keywords

• pension institutions
• pension assets
• pension funds
• financial development indicators
• granger causality test
• regression coefficient