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).