Corruption decreases liquidity available to institutional traders and discourages foreign portfolio investment inflows into a country. Corruption also increases corporations' cost of equity capital. The effects of corruption on foreign investment and the cost of equity capital are nonlinear and...

This paper examines whether the level of firms' cash holdings differ depending on the strength of investor protection, whether excess cash holdings are valued more with better investor protection, and whether cross-listed firms that improve investor protection through ‘bonding' hold relatively...