This paper investigates the impact of domestic investor protection on equity cross-border investment. We bring to light the lower sensitivity of foreign investment to destination countries’ corporate governance for those investors enjoying a higher degree of investor protection at home. This...

Different investor classes are endowed with different rights, and conflicting interests among them can make protection afforded to one party detrimental to another. We find that investor protection laws have sizeable “cross” effects on foreign portfolio investment and the direction of these...