Michael Knoll (Penn) has posted Taxation and the Competitiveness of Sovereign Wealth Funds: Do Taxes Encourage Sovereign Wealth Funds to Invest in the United States? on SSRN.  Here is the abstract:

Sovereign wealth funds (SWFs) control vast amounts of capital and have made and are continuing to make numerous large, high-profile investments in the United States, especially in the financial services industry. Those investments in particular and SWFs in general are highly controversial. There is much discussion of the advantages and disadvantages to the United States of investments by SWFs and there is an intense and ongoing debate over what should be the United States' policy towards investments by SWFs. In the course of that debate, some critics have called upon the US government to abandon its long-held public position of neutrality towards foreign investment and to use the income tax to discourage investments by SWFs. Surprisingly, in light of such calls, there is little understanding of how the tax system affects the competition among SWFs, private foreign investors and US investors to acquire US assets. It is that issue I seek to explore. Accordingly, in this essay, I develop a model for how taxes influence the ownership of assets, and I then apply that model to investments in US equities, US debt, and US real estate. Where feasible, I estimate the tax-induced advantage or disadvantage SWFs have relative to private foreign investors and US investors for each asset class under current law. I also discuss how US tax law could be reformed to reduce the existing tax-induced advantages and disadvantages of SWFs.