 Are investors really home-biased when investing at home?Andreas Oehler, Stefan Wendt and Matthias Horn Research in International Business and Finance, 2017, vol. 40, issue C, 52-60 Abstract: Investors who only invest in their domestic market are typically referred to as being home-biased. We refer to firm-level internationalization and call into question whether investing in domestic stock indices actually leads to home bias. We use three measures of firm-level internationalization based on percentages of foreign sales, employees in foreign countries, and foreign tax payments. We aggregate firm-level results to determine the degree of internationalization of German, French, UK and US stock indices. French and UK stock indices exhibit the largest degree of internationalization. The German index provides slightly less internationalization, whereas internationalization of the US index is lowest but nonetheless considerable. This means that investors who invest in their domestic market do not necessarily suffer from home bias. Instead, investing in domestic stock indices more likely prevents investors from a home bias instead of entrapping them to insufficient portfolios. Keywords: Home bias; International diversification; Internationalization; Investor information; Retail investors; Stock market index (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:40:y:2017:i:c:p:52-60 DOI: 10.1016/j.ribaf.2016.12.003 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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