Access to information and international portfolio allocation
Krishna Paudyal () and
Suman Neupane ()
Journal of Banking & Finance, 2013, vol. 37, issue 7, 2255-2267
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.
Keywords: Access to information; International equity portfolio; Panel data models; Legal/macro-institutions; Turbulent market condition (search for similar items in EconPapers)
JEL-codes: G11 G14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:37:y:2013:i:7:p:2255-2267
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