Economics at your fingertips  

Why is there a Home Bias? An Analysis of US REITs Geographic Concentration

Alain Coën, Arnaud Simon and Saadallah Zaiter

Finance, 2021, vol. 42, issue 1, 111-154

Abstract: The aim of this paper is to shed new light on the home bias puzzle employing growth options. Using a unique property-level dataset, we show that geographically concentrated real estate investment trusts (REITs) are better able to exploit growth options than non-concentrated REITs. Our empirical results report that the beta of growth options is significantly greater than the beta of assets-in-place for REITs with higher geographic concentration. We also find evidence that growth options rather than assets-in-place seem to be an important component of geographically concentrated REITs? valuations. Overall, we suggest an explanation of the relationship between higher performance and lower geographical distance in the investment decision-making process.

Keywords: real estate investment trusts; geographic concentration; information asymmetry; beta growth options; assets-in-place (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf) (text/html)

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:

Access Statistics for this article

More articles in Finance from Presses universitaires de Grenoble
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().

Page updated 2021-10-03
Handle: RePEc:cai:finpug:fina_421_0111