publication . Article . Preprint . 2012

Financial Education, Investor Protection and International Portfolio Diversification

Maela Giofré;
Open Access English
  • Published: 01 Oct 2012
  • Country: Italy
Abstract
This paper investigates the tension between regulation and financial education in explaining one of the major puzzles in international finance, that is the lack of international diversification. We show that both dimensions are relevant: higher investor’s financial education fosters international investment and stronger minority investor protection legislation attracts inward investment. More interestingly, these factors appear to be substitute in enhancing investor’s portfolio diversification: the role of financial education is particularly pronounced where information problems and monitoring costs are likely to be more severe, that is in countries where protec...
Subjects
free text keywords: jel:G11, jel:G15, jel:G30, Diversification (finance), Main channel, Financial ratio, Investor protection, Inward investment, Finance, business.industry, business, Diversification (marketing strategy), Financial system, Legislation, Economics, International finance
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