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The purpose of this paper is to provide an explanation for the way the reality in the world of finance comes to be formed, among other things, by the theory of finance. It is based on the idea that financial behavior is not independent of the theory of finance. The paper, therefore, examines certain aspects of the academic field of finance. That is, it examines theories, PhD programs, journals, and conferences in academic finance. It notes that they adhere, almost exclusively, to a certain worldview, called the functionalist paradigm. Then, the paper discusses the role of finance graduates as employees of universities, corporations, and financial institutions in the practice of finance. In this way, the paper provides an explanation for the social construction of the world of finance.

This paper reviews the relatively more recent literature on equity home bias – the empirical finding that people overinvest in domestic stocks relative to the optimal investment portfolio implied by the modern portfolio theory. It reviews six broad classes of explanation of this puzzling phenomenon: (1) hedging home risks; (2) barriers to foreign investments; (3) information asymmetries; and (4) behavioral factors. The consensus is that none of the explanations can account for the full extent of the bias by itself, thus the home bias should be explained by a combination of rational and behavioral factors.

Purpose -The purpose of this paper is to show how different philosophical schools of thought view the relation between globalization and culture differently. Design/methodology/approach -This paper places the existing philosophical schools of thought into four broad categories: functionalist, interpretive, radical humanist, and radical structuralist. This paper then shows how each of these four broad categories view the relation between globalization and culture differently. Findings -This paper finds that the functionalist paradigm views globalization and culture as universal, the interpretive paradigm views globalization and culture as particular, the radical humanist paradigm views globalization and culture as a domination ideology, and the radical structuralist paradigm views globalization and culture as causing conflict between classes.Research limitations/implications -This paper assumes that each school of thought can be located in one of the four broad categories of philosophical schools of thought. However, this may not be applicable to each and every philosophical school of thought. Practical implications -This paper implies that one would benefit by becoming familiar with other ways of seeing the same phenomenon. This paper shows that the relation between globalization and culture can be viewed at least from four different vantage points and therefore one would have a better understanding of the relation between globalization and culture if one becomes familiar with all four different view points. Originality/value -The contribution of this paper is the advice that in the era of globalization it is better for people to become open-minded because different people from different parts of the world have different perspectives and the best way to be able to live together is to learn about how others think.