Pension Fund Investment: Implications for the Real Economy

Given the increasing importance of funded pension systems around the world, it is crucial to understand the impacts of such systems on the real economy. This thesis examines the economic effects of pension funds from various perspectives. The three chapters of this thesis produce new empirical evidence on that issue by applying advanced micro-econometric methods to novel data on pension fund asset allocation.
In summary, this thesis finds that domestic pension funds exhibit unique trading behaviours, including a longer investment horizon, compared to other institutional in-vestors, justifying their recognition as long-term investors in policy discussions on funded pension systems. Moreover, this thesis shows that pension fund investment positively affects the productivity of domestic firms. Lastly, this thesis finds a positive relation-ship between pension fund investment and increased patenting activities at the firm level.
These results are important evidence that domestic pension funds support the domes-tic economy highlighting the wider economic benefits of funded pension systems. The findings of this thesis are relevant for policy makers, researchers and financial sector stakeholders interested in understanding the broader economic implications of funded pension systems.