Using bilateral capital flows data from 10 advanced reporting economies — with over 186 bilateral country pairs — for 2000 to 2016, this paper provides strong evidence on the significance of gravity factors, including distance and bilateral trade ties, in explaining cross-border financial...

Holdings of cross-border bilateral assets are highly responsive to information frictions, market size, transaction costs, and trade ties. But empirical support using transactions data are constrained by the lack of comprehensive bilateral capital flows data covering large sample of economies for...