EconPapers    
Economics at your fingertips  
 

Home Bias at Home: Local Equity Preference in Domestic Portfolios

Joshua D. Coval and Tobias J. Moskowitz

Journal of Finance, 1999, vol. 54, issue 6, 2045-2073

Abstract: The strong bias in favor of domestic securities is a well‐documented characteristic of international investment portfolios, yet we show that the preference for investing close to home also applies to portfolios of domestic stocks. Specifically, U.S. investment managers exhibit a strong preference for locally headquartered firms, particularly small, highly levered firms that produce nontraded goods. These results suggest that asymmetric information between local and nonlocal investors may drive the preference for geographically proximate investments, and the relation between investment proximity and firm size and leverage may shed light on several well‐documented asset pricing anomalies.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (1026)

Downloads: (external link)
https://doi.org/10.1111/0022-1082.00181

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:54:y:1999:i:6:p:2045-2073

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).

 
Page updated 2024-12-26
Handle: RePEc:bla:jfinan:v:54:y:1999:i:6:p:2045-2073