Three essays on international capital flows

The dissertation includes three papers on international capital flows.; The first paper studies the exogenous determinants that are likely to facilitate or hamper international capital flows. The effects of adjacency, geographic distance, linguistic ties, ethnic ties and corruption level on the geographical distribution of non resident equity securities holdings, non-resident debt securities holdings and foreign direct investment (FDI) are investigated. The conclusions state that culturally close countries have more international investment in each other for both FDI and portfolio investment. Geographic distance negatively affects all types of the international investment. A corrupt environment hampers international investment. FDI is more cultural and geographical relation-intensive than equity securities investment, and more so than debt securities investment.; By using International Monetary Fund (IMF) benchmark survey data of nonresident equity securities holdings, in the second paper the cross-sectional equity securities home bias of major investor countries is measured against a wide range of individual destination countries. The role of cultural ties on equity holding home bias is considered. These ties include language, ethnicity, religion, law origin, and geographic distance. The effects of corruption level, degree of law enforcement, difference of accounting standards and variance of exchange rate on the equity home bias are also tested. The results show that these factors heavily influence cross-sectional equity holding home bias.; In the third paper, the measurement of securities holding home bias against aggregate foreign countries is constructed, and the degree of home bias of twenty-nine investor countries are calculated. The influence of asymmetric information and impact of the development of institutional investors at the investor-country end on securities home bias are focused. Transnationality index, inward FDI index, development of institutional investors, average capital size of listed firms in the exchange, corruption level, variance of exchange rate, law enforcement, trade barrier, interest rate spread with LIBOR, and inflation rate are studied as explanatory variables. The empirical results show that most of these variables of investor countries are statistically significant in explaining security holding home bias.