Abstract:

Sovereign Wealth Funds (SWFs) have become increasingly influential in global financial and capital markets. They present a relevant role in economic and development on domestic level, but their theoretical underpinnings and conceptual frameworks remain underexplored in the literature. The diverse nature of SWFs, in terms of objectives and investment strategies, necessitates a comprehensive theoretical review to better understand their roles and implications in global and local markets. This article aims to analyze and synthesize the main existing theories and frameworks that explain the origin, development, and functioning of SWFs, and to explore the implications of these funds on the global and local level. The review is organized around key theoretical perspectives, including economic and political theories, as well as conceptual frameworks that address the strategic objectives and operational models of SWFs. This review found that increased in the international community interested in these innovative investment instruments due to their significant implications on for the stability and development of the local economies from which these funds come on the one hand and on other hand their significant implications on the international capital market, the global financial system and the international economic model. The findings also suggest potential policy implications for managing the growing influence of SWFs in international markets. This conceptual review underscores the importance of developing a more nuanced theoretical understanding of Sovereign Wealth Funds. This article offers one basis for future research that can address the complexities of SWFs and their impact on global and local financial systems.

Keywords:

Sovereign funds, risk, financial markets, financial management, financial return.

How to Cite:

Basim Khaleel Saadon, Fernando de Llano Paz and Paulino Martínez Fernández. Theoretical and Conceptual Bases of Sovereign Funds . [ref]: vol.22.2024. available at: https://refpress.org/ref-vol22-a39/