Using panel data from 23 developed countries over the 2001-2011 period and employing the Arellano-Bover/Blundell-Bond dynamic panel estimation technique, we show that the source country capital gains tax has a negative and statistically significant impact on foreign portfolio equity holdings. On...

The relationship between cross border taxation and free float home bias is examined. This explicitly recognizes that insider shares are unavailable to foreigners. Other important explanations for home bias - information asymmetry, behavioural and governance issues - are controlled when examining...