Home bias and high turnover: Dynamic portfolio choice with incomplete markets

Hnatkovska, Viktoria

doi:10.1016/j.jinteco.2009.06.006

Cited by 61 publications

(30 citation statements)

References 57 publications

(102 reference statements)

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“…Since asset markets are incomplete, the results also show a significant home bias for transnational transactions in the financial market. Investors often trade a lot in foreign assets and hold so little of them in their portfolios, which increases the riskiness of foreign assets and facilitates risk-sharing across countries [30].…”

Section: Studies On Home Biasmentioning

confidence: 99%

Distance Diffusion of Home Bias for Crowdfunding Campaigns between Categories: Insights from Data Analytics

et al. 2018

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As the information communication and investment of crowdfunding campaigns are usually accomplished online, online crowdfunding theoretically breaks the limitation of space. However, investors' behaviors still show significant home bias; furthermore, from a dynamic view, the changes in home bias during the funding duration reflect the investment preference. This paper studies the dynamics of home bias in crowdfunding investment as well as the distance diffusion of home bias in the crowdfunding market through data mining and econometric models. The distance between investors and founders gradually increases from 3605 km to 4229 km as the funding progresses, and home bias shows different diffusion patterns between categories. For most of the campaigns, the distance between backers and founders of the successful campaigns is always greater than that of the failed ones; thus, the distance diffusion impacts the pledge results. However, the study also finds that for some categories, home bias does not play a positive role in investment or that it even shows negative impacts, among which food and technology are two extreme categories. The study provides a theoretical basis from the perspective of user behavior to analyze online investment and to improve the promotion of crowdfunding campaigns.

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Section: Studies On Home Biasmentioning

confidence: 99%

Distance Diffusion of Home Bias for Crowdfunding Campaigns between Categories: Insights from Data Analytics

et al. 2018

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“…The results showed that the enforcement of securities law must exceed a critical level to ensure a significant impact of corporate transparency on the home bias. To increase the validity of disclosed company information, false 13 Various other determinants of the equity home bias have been studied in the literature including barriers to foreign investment (Black, 1974;Stulz, 1981;Errunza and Losq, 1985), exchange rate volatility (Fidora et al, 2007), transaction costs (Martin and Rey, 2004;Portes and Rey, 2005), the risk of expropriation (Dahlquist et al, 2003;Kho et al, 2009;Leuz et al, 2009), trade costs in goods markets (Obstfeld and Rogoff, 2000;Coeurdacier, 2009), consumption risk (Hnatkovska, 2010), investors' inattentiveness (Mondria et al, 2010), diversification benefits (Coeurdacier and Guibaud, 2011), financial integration (Baele et al, 2007), or socio-economic features of investors (Karlsson and Nordén, 2007). reporting should be punished more efficiently by stratifying liability standards (i.e. easing the procedural difficulties for shareholders in recovering losses from the company and its management) and by increasing the staff of the national securities supervisory agency.…”

Section: Discussionmentioning

confidence: 99%

Equity home bias and corporate disclosure

Eichler

2012

Journal of International Money and Finance

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“…We can now combine our three key equations, (26), (28) and (31) to explore the relationship between portfolio choice, relative price movements, and international risk-sharing. We start by substituting (31) into (28) to express the difference in consumption as a function solely of the difference in investment:…”

Section: Macroeconomic Intuitionmentioning

confidence: 99%

“…The set of candidate frictions is long and includes proportional or fixed costs on foreign equity holdings (Lewis, 1996;Amadi and Bergin, 2006;Coeurdacier and Guibaud, 2006), costs in goods trade (Uppal, 1993;Obstfeld and Rogoff, 2000;Coeurdacier, 2006), liquidity or short sales constraints (Michaelides, 2003;Julliard, 2004), price stickiness in product markets (Engel and Matsumoto, 2006), weak investor rights concentrating ownership among insiders (Kho et. al., 2006), non-tradability of nontraded-good equities (Tesar, 1993; Pesenti and van Wincoop, 2002;Hnatkovska, 2005) and asymmetric information in financial markets (Gehrig, 1993;Jeske, 2001;Hatchondo, 2005;and van Nieuwerburgh and Veldkamp, 2007).…”

Section: Introductionmentioning

confidence: 99%