While the notion that firms pursue innovation is not controversial, it is one of the most complex processes employed by organizations and results vary greatly across companies. This paper investigates the link between budgetary participation intensity and innovation, using communication, job satisfaction and decentralization as mediators to such relationships. Our findings in a developing country setting indicate that budgetary participation intensity is antecedent to communication, job satisfaction and decentralization which in turn affect innovation. Moreover, budgetary participation intensity affects indirectly innovation when these variables are embedded in Path Analysis Modeling as mediators between budgetary participation and innovation.

This paper investigates whether IFRS adoption reduces the home bias equity using the information asymmetry as a mediator variable to this relationship. Focusing in countries included in the Coordinated Portfolio Investment Survey “CPIS” our sample is composed by 512 observations (country-year) that cover the period 2003 to 2012. Our finding indicates that the full IFRS adoption reduces the information asymmetry and then the home bias. These results validate our expectations. Nevertheless, the partial IFRS adoption doesn’t clearly support our expectations. We found that the partial IFRS adoption increases significantly the information asymmetry but reduces the home bias. This paper examined the effect of others factors that prior researches indicate that they affect the home bias as the governance indicators, the economic indicators, equity market characteristics and the capital controls.

Despite the well-known gains of the international diversification, investors have the tendency to overinvest in domestic equities. This irrational behavior is called home bias. It is considered by Obstfeld and Rogoff (2000) as one of the six major puzzles in the international macroeconomics. The present paper examines the different determinants to understand this major puzzle. Based on a sample of 564 observations (countries-years) that cover the period 2003 to 2013, we found that home bias is explained by the information asymmetry that exists between countries and their economic volatility (assessed by the growth rate of the gross domestic product). Furthermore, our findings indicate that home bias decreases among developed markets and countries characterized by a higher rule of law.