Investing at Home and Abroad: Different Costs, Different People?

Dimitris Christelis and Dimitris Georgarakos

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We investigate US households’ direct investment in stocks, bonds and liquid accounts and their foreign counterparts, in order to identify the different participation hurdles affecting asset investment domestically and overseas. To this end, we estimate a trivariate probit model with three further selection equations that allows correlations among unobservables of all possible asset choices. Our results point to the existence of a second hurdle that stock owners need to overcome in order to invest in foreign stocks. On the other hand, we find little evidence for additional pecuniary or informational costs associated with investment in foreign bonds and liquid accounts.

Keywords: Foreign assets; household finance; stockholding; multivariate probit; simulated maximum likelihood; selection. (search for similar items in EconPapers)
Date: 2008-01-01, Revised 2013-01-10
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Citations: View citations in EconPapers (12)

Published in Journal of Banking and Finance, Vol. 37, 6, June 2013, pp. 2069–2086

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http://www.csef.it/WP/wp188.pdf (application/pdf)

Related works:
Journal Article: Investing at home and abroad: Different costs, different people? (2013)
Working Paper: Investing at home and abroad: Different costs, different people (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:188

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