Özet:

The structure of international portfolio investments depend on investors' risk aversion. The COVID-19 global crisis has caused the global risk to rise to unprecedented levels in the world economy and the risk aversion of investors to increase. The investor's risk aversion is not independent of his information of the financial market in which he will invest. Therefore, considering the impact of information costs on the risk of financial asset returns, it can be expected that the impact of the COVID-19 crisis on portfolio investments between countries will differ. In this context, the aim of the study is to examine the impact of the COVID-19 crisis on bilateral portfolio investments through the information costs channel. The analysis is carried out with a financial gravity model that controls the effect of information costs such as geographical and cultural proximity. The model has been tested with EKK and PPML estimators for the bilateral portfolio investments of 120 countries as of 2010-2020. The empirical financial gravity model results show that the effects of information costs represented by geographical and cultural proximity on international portfolio investments are also significant during the COVID-19 crisis. During the COVID-19 crisis period, investors preferred financial assets of countries that are geographically and culturally more distant from them, even though their information costs are low.

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