Financial education, investor protection and international portfolio diversification

This paper investigates the effect of financial education on foreign portfolio investment. We show that higher investor financial education fosters international diversification, and that its role is particularly pronounced where information problems and monitoring costs are likely to be more severe, that is, in countries where
protection of minority shareholders’ rights is weaker. We interpret this evidence as supportive of the conjecture that financial education lessens the informational constraints binding foreign investors.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


Mission en strategy           •           Network           •           Organisation           •          Magazine
Board Brief            •            Actionplan 2023-2027           •           Researchagenda


Our partners

B20160708_university of groningen
B20211201_Cardano_Logo 2021_website
AFM logo 2023 zwart wit
View all partners