2025-05-072025-05-072025-05-07https://repositorio.redinvestigadores.org//handle/Riec/137We examine the impact of foreign investor heterogeneity on local lending, focusing on Colombia from 2014 to 2023. Distinguishing between benchmark-driven and unconstrained investors, we highlight their differing responses to global and idiosyncratic shocks. Using bond-level data and the corporate credit registry, we link banks’ exposure to foreign flows with firm-level lending decisions. By decomposing Colombia’s weight in the J.P. Morgan GBI-EM index into valuation and exogenous components, we identify how investor behavior shapes bank balance sheets. Our main findings show that banks with greater exposure to unconstrained investors significantly expand lending during capital inflows, whereas those linked to benchmark-driven investors exhibit a more muted response. These results emphasize the role of investor composition in financial stability and provide key insights for policymakers in emerging markets.47 páginasPDFengOpen AccessWorking paperF3 - International FinanceF4 - Macroeconomic Aspects of International Trade and FinanceG01 - Financial CrisesG11 - Portfolio Choice; Investment DecisionsG12 - Asset Pricing; Trading Volume; Bond Interest RatesG15 - International Financial MarketsCapital flowsForeign investmentInvestor classificationJ.P. Morgan GBI-EM indexEmerging marketsAcceso abiertoAtribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0