%0 Journal Article
%T Liability
%A Annina Kaltenbrunner
%A Bruno Bonizzi
%J Environment and Planning A: Economy and Space
%@ 1472-3409
%D 2019
%R 10.1177/0308518X18794676
%X This paper explores the determinants and implications of the growing allocation of insurance companies and pension funds to emerging markets. The key contention put forward is that liabilities are at the core of the portfolio choice of insurance companies and pension funds, and that this has important consequences for the stability of asset demand. The paper supports this contention with a theoretical framework based on Hyman Minsky and the results from 22 semi-structured interviews with European insurance companies and pension fundsĄŻ executives, investment consultants, and asset managers. It shows that the rising insurance companies and pension fundsĄŻ demand for emerging marketsĄŻ assets has to be analysed in the context of the pressures resulting from structural funding deficits and low yields. Emerging marketsĄŻ assets are sought as part of the sectorĄŻs strategy to increase returns and, given their subordinate integration into a spatially uneven international monetary and financial system, remain not suited to directly meet insurance companies and pension fundsĄŻ liabilities. This causes insurance companies and pension fundsĄŻ demand for these assets to be volatile and independent of conditions in these countries, reproducing emerging marketsĄŻ monetary and financial subordination. By stressing the structural financial (in)stability implications insurance companies and pension fundsĄŻ liabilities have for emerging marketsĄŻ asset demand, the paper contributes to the literature on insurance companies and pension fundsĄŻ investments in emerging markets and bridges the gap between those which have noted the importance of liability conditions for insurance companies and pension funds and the literature pointing to the destabilising impact of insurance companies and pension funds due to behavioural and agency issues. Moreover, by basing itself on a Minskyan theoretical framework, it responds to recent calls for a more systematic incorporation of heterodox economic thought into financial geography
%K Institutional investors
%K liability-driven investment
%K emerging markets
%K Minsky
%K pension funds
%U https://journals.sagepub.com/doi/full/10.1177/0308518X18794676