Abstract

http://ssrn.com/abstract=1990828
 
 

References (45)



 
 

Citations (5)



 


 



New Evidence on the Financialization of Commodity Markets


Brian J. Henderson


George Washington University - Department of Finance

Neil D. Pearson


University of Illinois at Urbana-Champaign - Department of Finance

Li Wang


University of Illinois at Urbana-Champaign

August 20, 2014


Abstract:     
This paper uses a novel dataset of Commodity-Linked Notes (CLNs) to examine the impact of the flows of financial investors on commodity futures prices. The investor flows into and out of CLNs are passed through to and withdrawn from the futures markets via CLN issuers’ hedge trades. The flows are not based on information about the contemporaneous and subsequent futures price movements, but nonetheless cause increases and decreases in commodity futures prices when they are passed through to and withdrawn from the futures markets, respectively. These finding are consistent with the hypothesis that non-information based financial investments have important impacts on commodity prices.

Number of Pages in PDF File: 42

Keywords: financialization, commodity-linked notes, commodity structured products, commodity index investors, commodity futures

JEL Classification: G13, G14, G18

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Date posted: January 25, 2012 ; Last revised: August 21, 2014

Suggested Citation

Henderson, Brian J. and Pearson, Neil D. and Wang, Li, New Evidence on the Financialization of Commodity Markets (August 20, 2014). Available at SSRN: http://ssrn.com/abstract=1990828 or http://dx.doi.org/10.2139/ssrn.1990828

Contact Information

Brian Joseph Henderson
George Washington University - Department of Finance ( email )
Department of Finance, Funger Hall
2201 G Street, NW
Washington, DC 20052
United States
202-994-3669 (Phone)
Neil D. Pearson (Contact Author)
University of Illinois at Urbana-Champaign - Department of Finance ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
217-244-0490 (Phone)
217-244-9867 (Fax)
Li Wang
University of Illinois at Urbana-Champaign ( email )
601 E John St
Champaign, IL 61820
United States
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