The demand for public information by local and nonlocal investors: Evidence from investor-level data

Home bias in shareholder voting

“…Business ties and board connections between investors and firms affect voting behavior (Davis and Kim, 2007;Cvijanovic et al, 2016;Calluzzo and Kedia, 2019;Duan et al, 2021). These connections are more common when the investor and the firm are located in the same country, which could potentially explain the home bias in voting found in Section 4.…”

“…Common language, similar culture, and short distance could all contribute to familiarity bias (Grinblatt and Keloharju, 2001). Salience bias has also been proposed as a possible explanation for home bias (Dyer, 2021). Investors receive more exposure to local news media of local firms, which naturally leads to increased salience.…”

“…According to Insightia, the data is sourced from disclosures to market regulators, investors' and companies' own websites, Freedom of Information Act requests, and direct communication with investors.2 The Insightia investor voting database also comprises the votes cast by other types of investors such as labor union and pension funds that make up a small fraction of the database. I do not include these investors in my sample for the sake of comparability, as these investors may have other incentives for voting differently (e.g.,Duan, Jiao and Tam (2021)). Also, voting data on these investors are mostly confined to the U.S., which does not add much value to the analysis.…”

The Effects of Local Shareholders on Firm Performance: Evidence From Corporate Social Responsibility

“…Previous studies suggest that local shareholders are informed and better at monitoring proximate firms since their cost of acquiring monitoring information is low relative to distant shareholders (Ayers et al, 2011;Dyer, 2021;Dyer et al, 2021). Chhaochharia et al (2012) also find that firms with high local ownership have better internal governance and are more profitable.…”

Geographic Peer Effects in Management Earnings Forecasts*

“…We believe this argument is unlikely to hold for two reasons. First, instead of forecasts eroding a local investor's information advantage, there is some evidence that local investors extend their information advantage through their use of public information (Dyer 2021). Second, there is an ongoing debate about whether this tilt toward local stocks arises because local investors have an information advantage or because of other factors, such as familiarity with local firms (Huberman 2001; Seasholes and Zhu 2010; Pool et al 2012).…”