This paper investigates the determinants of international transac-tions in financial assets empirically. We extend the gravity model in Portes et al. (2000) by introducing an internet variable. Using cross-country panel data on the portfolio flows between the US and other countries from 1990 to 2008, we found that the Internet turns out to mitigate the information asymmetries and thus increases cross-border portfolio flows between countries.

 I. Introduction 

II. Model and Data 

III. Empirical Results 

IV. Conclusion 

References 

Appendix