Home bias, transactions costs, and prospects for the Euro: a more detailed analysis

Catherine Mann and Ellen Meade

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper brings together the literature on determination of home bias in equity holdings and the portfolio balance model of exchange rates to consider whether the dollar might be affected by a change in transactions costs that alters international portfolio allocations. Our empirical findings lend support to the view that transactions costs have a significant influence on US portfolio holdings, even after accounting for float market share. In addition, new survey evidence on the equity holdings of European firms indicates home bias for European investors, and points to a reduction in the magnitude of this home bias since 1997.

Keywords: portfolio choice; equity flows; exchange rates (search for similar items in EconPapers)
JEL-codes: F21 F31 G11 G15 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://eprints.lse.ac.uk/20076/ Open access version. (application/pdf)

Related works:
Working Paper: Home Bias, Transactions Costs, and Prospects for the Euro: A More Detailed Analysis (2002)
Working Paper: Home Bias, Transaction Costs, and Prospects for the Euro: A More Detailed Analysis (2002)
Working Paper: Home bias, transactions costs, and prospects for the Euro: A more detailed analysis (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:20076

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