The Role of Information Asimmetries and Inflation Hedging in International Equity Portfolios

Abstract

We investigate the role of information asymmetries and inflation hedging in shaping international equity portfolios. We confirm, in a multinational setting, Cooper and Kaplanis (1994) result of no inflation hedging motive driving investors' behavior and find evidence of a crucial role for financial market development and trade linkages.equity home bias; portfolio choice; inflation hedging; information asymmetries