Private Information, Human Capital, and Optimal "Home Bias" in Financial Markets
Isaac Ehrlich (),
Jong Shin and
Yong Yin ()
Journal of Human Capital, 2011, vol. 5, issue 3, 255 - 301
By allowing for imperfectly informed markets but optimal private information acquisition, we offer new insights about observed variations in portfolio concentrations in domestic versus foreign risky assets, or "home bias," and the degree to which home asset prices are "information revealing." Our model produces discriminating hypotheses about the role of "specific" and "general" human capital endowments and opportunity costs of managing risky assets in determining whether to hold these assets and how their portfolio shares vary across heterogeneous investors and financial markets. These hypotheses are supported by numerical and econometric analyses of panel data from the United States and 23 international financial markets.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Access to the online full text or PDF requires a subscription.
Working Paper: Private Information, Human Capital, and Optimal "Home Bias" in Financial Markets (2011)
Working Paper: Private Information, Human Capital, and Optimal "Home Bias" in Financial Markets (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jhucap:doi:10.1086/662546
Access Statistics for this article
More articles in Journal of Human Capital from University of Chicago Press
Series data maintained by Journals Division ().