This paper analyzes the determinants of cross-border equity flows between 14 countries from 1989 to 1996 using a new panel data set. The results show that the geography of information significantly influences international transactions. The study integrates elements from the finance literature on portfolio composition and the international macroeconomics and asset trade literature. Gross asset flows depend on market size in both source and destination countries, as well as trading costs, which include information and transaction technology. The resulting augmented gravity equation includes variables representing market size (equity market capitalization), distance (proxying informational asymmetries), and openness. Other variables explicitly represent information transmission (telephone call traffic and multinational bank branches), information asymmetry between domestic and foreign investors (degree of insider trading), and transaction efficiency (financial market sophistication). The equation accounts for almost 70% of the variance in transaction flows. Dummy variables for adjacency, language, currency, trade blocs, and major financial centers do not improve results. The key role of informational asymmetries is confirmed. Information transmission variables also improve standard gravity equations for goods trade. The study shows that distance is largely a proxy for information asymmetries. The results suggest that theoretical modeling of asset trade should shift towards models including differentiated assets, transaction costs, and information asymmetries. The findings have important implications for understanding asset flows, portfolio composition, and international capital flows. The study also highlights the importance of information in explaining cross-border equity flows and suggests that information asymmetries play a key role in international transactions. The results indicate that the geography of information is central to the distribution of asset flows. The study provides new insights into the determinants of cross-border equity flows and has important implications for international finance and trade.This paper analyzes the determinants of cross-border equity flows between 14 countries from 1989 to 1996 using a new panel data set. The results show that the geography of information significantly influences international transactions. The study integrates elements from the finance literature on portfolio composition and the international macroeconomics and asset trade literature. Gross asset flows depend on market size in both source and destination countries, as well as trading costs, which include information and transaction technology. The resulting augmented gravity equation includes variables representing market size (equity market capitalization), distance (proxying informational asymmetries), and openness. Other variables explicitly represent information transmission (telephone call traffic and multinational bank branches), information asymmetry between domestic and foreign investors (degree of insider trading), and transaction efficiency (financial market sophistication). The equation accounts for almost 70% of the variance in transaction flows. Dummy variables for adjacency, language, currency, trade blocs, and major financial centers do not improve results. The key role of informational asymmetries is confirmed. Information transmission variables also improve standard gravity equations for goods trade. The study shows that distance is largely a proxy for information asymmetries. The results suggest that theoretical modeling of asset trade should shift towards models including differentiated assets, transaction costs, and information asymmetries. The findings have important implications for understanding asset flows, portfolio composition, and international capital flows. The study also highlights the importance of information in explaining cross-border equity flows and suggests that information asymmetries play a key role in international transactions. The results indicate that the geography of information is central to the distribution of asset flows. The study provides new insights into the determinants of cross-border equity flows and has important implications for international finance and trade.