The heritage of international finance

This paper examines the heritage of international academic-finance. Definitions of international empirical and theoretical research are proposed, and an economic characterization of a nation is offered. In addition, an extensive taxonomy of the finance discipline is suggested, and notable domestic and international research is referenced in each of its proposed subfields. The taxonomy illustrates the dramatic neglect of international research in academic finance, and suggests possible areas for future research. The taxonomy also shows that even when international research in a particular subfield emerges, it is usually a simple extension of a domestic theory that has been in the subfield for many years. This apparent neglect may be explained by the lack of a good equilibrium model of international asset pricing, problems modelling partial market segmentation and culture, lack of good international treatments in finance textbooks, and previously unavailable international data. In sum, this review suggests that there exists first-mover advantages in international finance research and teaching, and implies that Canadian finance academics should seize them while these advantages still exist.