Information and Capital Flows Revisited: The Internet as a Determinant of Transactions in Financial Assets

Changkyu Choi (), Dong-Eun Rhee and Yonghyup Oh ()
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Changkyu Choi: Myongji University
Yonghyup Oh: Korea Institute for International Economic Policy

No 10-10, Working Papers from Korea Institute for International Economic Policy

Abstract: This paper investigates the determinants of international transactions in financial assets empirically. We extend the gravity model in Portes et al. (2000) by introducing an internet variable. Using cross-country panel data on the portfolio flows between the US and other countries from 1990 to 2008, we found that the Internet turns out to mitigate the information asymmetries and thus increases cross-border portfolio flows between countries.

Keywords: Capital Flows; Financial Assets; The Internet; Portfolio Flows; Gravity Equation (search for similar items in EconPapers)
JEL-codes: C23 F21 O33 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010-12-30
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Journal Article: Information and capital flows revisited: The Internet as a determinant of transactions in financial assets (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2010_010

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