This study examines how block share acquisitions of foreign investors affect stock returns of domestic target firms in Korea, focusing on the information asymmetry between target firms and foreign acquirers and the shareholder right protection in foreign acquirers' home countries. There are at least two important reasons that using Korean data of block share acquisitions by foreign investors benefits the literature. First, Korean firms are well known to have poor governance systems and it is thus questionable whether foreign investors can improve firm value by monitoring as an outside blockholder when the investor protection is relatively low and whether geographic and cultural proximity of foreign investors can reduce information asymmetry with relatively low firm transparency in Korea. Second, investors are legally required to disclose their block holding intentions in Korea, which helps identify the effects of monitoring by blockholders on firms' stock returns. Using 164 block share acquisitions in which foreign investors acquire at least 5% but less than 50% of a target firm's stock shares from 1996 to 2016 as a sample, we find that stock returns of targets significantly increase when these block acquisitions are announced. To measure the information asymmetry foreign investors face in Korea, we use both geographic and cultural distances between foreign investors' home countries and Korea and show that the positive stock market reactions to block acquisitions by foreign investors are more pronounced when the foreign block acquirers are geographically or culturally proximate to the host country. Moreover, we show that the value-increasing effects of geographic and cultural proximity of foreign investors on target stock returns are more evident when the foreign acquirers disclose their intentions to intervene in the management of target firms, suggesting that anticipated monitoring by foreign blockholders is an important determinant of the observed market reactions to their block share acquisitions. We also investigate how the extent of shareholder right protection in the home country of foreign acquirers influences the announcement returns of block acquisitions, using as a measure the difference in the shareholder rights scores between foreign acquirers' home countries and Korea. We find positive stock price reactions to block acquisitions by foreign investors from countries with strong shareholder rights when they announce their monitoring incentives by stock market disclosures. In addition, we investigate whether the above findings vary according to the firm-specific information asymmetry measures such as a target firm's size, age, tangibility, and R&D intensity, whether a target is listed in the KOSDAQ market, and whether it has credit ratings and the firm-specific governance measures such as its free cash flow and board size. We show that the value-enhancing effects of block acquisitions by foreign acquirers from geographically and culturally proximate countries and countries with strong shareholder rights are particularly evident when the firms targeted by foreign acquirers are likely to have higher information asymmetry and poorer governance systems according to the above-listed measures. Our results suggest that the stock market favorably responds to block share acquisitions by foreign investors anticipating their effective roles of monitoring target firms and firm value improvement facilitated by the active monitoring. Our results also indicate that these value increases by expected monitoring by foreign acquirers are more evident when the concerns on the information asymmetry between investors and targets are lower, when foreign acquirers are likely to have higher standards for the rights of shareholders, and when active monitoring is more likely to improve corporate governance and firm value. Our study contributes to the related literature in the following ways. First, our research confirms that considering heterogeneity among foreign investors is important in examining the impact of foreign investors on firms in the host country. We show that the heterogeneity in information accessibility of foreign investors due to their geographic and cultural proximities and in the shareholder rights protection in their home country matters in market valuation of their monitoring, in addition to the heterogeneity in shareholder activism in their home country (Kim, Sung, and Wei, 2017). Second, we supplement prior studies that investigate how information asymmetry between the host country and the home country of foreign investors and shareholder rights in their home country affect their governance activities and firm value (Kang and Kim, 2010), by exploiting the system of block holding disclosures in Korea and firm-specific measures of information asymmetry and corporate governance. Specifically, our findings suggest that the stock value increase in block acquisitions by foreign investors is attributable to the monitoring intentions of foreign investors with effective information accessibility and strong governance incentives, especially in firms with higher information asymmetry and poorer governance.