With the rapid increase in foreign investment in emerging market debt securities after the Global Financial Crisis; episodes of extreme volatility such as the COVID shock and growing literature on a “pecking order” of capital flows (generally critical of portfolio flows, especially debt), this research aims to improve the measurement and understanding of portfolio debt flows to emerging markets using data on both the supply of emerging market bonds and the composition of demand from foreign investors.

The research also reveals some stylized facts on portfolio debt flows to emerging markets; measures the role of offshore issuance; and explores the investor base by looking into evidence on euro area investment in EMs based on micro data.