Journal of Banking & Finance Vol. 37 No. 7 2013
Access to information and international portfolio allocation
Abstract
We examine whether foreign equity holdings of portfolio investors depend on the level of information accessibility between the investors’ home and host countries. Using a comprehensive data set, alternative measures of information accessibility and robust analytical techniques, we show that differences in access to cross-country information significantly influence investors’ portfolio allocation decisions. Furthermore, the results suggest that for a given level of access to information, investors prefer to invest more in countries with a higher quality of legal/macro-institutions. Finally, the findings also confirm that the implications of information accessibility are more pronounced when markets are turbulent.
- DOI
- 10.1016/j.jbankfin.2013.01.011
- Volume
- 37
- Issue
- 7
- Pages
- 2255-2267
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref