Does corporate governance risk at home affect investment choices abroad?

► This paper studies whether and how corporate governance characteristics of an investor affects its foreign investment patterns. ► If finds that investors from a low control-ownership disparity country tend to dislike high-disparity stocks. In contrast, investors from a high disparity country do not appear to care as much. ► The aversion to high-disparity stocks by investors from low-disparity countries appears to be a phenomenon that was developed only since the Asian financial crisis.