Home Equity Bias Vs Equity Bias: Theory and Evidence

2006 ◽  
Author(s):  
En-Te (John) Chen
Keyword(s):  
Home Equity ◽  
Home Equity Bias

The Effects Of Restricting Capital Outflows On Investment In An Open Economy

2011 ◽  
Vol 22 (4) ◽  
Author(s):  
Mark L. Muzere
Keyword(s):  
Developing Country ◽  
Open Economy ◽  
Foreign Investment ◽  
Economic Conditions ◽  
Investment Horizon ◽  
Font Size ◽  
Home Equity ◽  
Foreign Investors ◽  
Home Equity Bias ◽  
Capital Outflows

<p class="MsoBodyText2" style="text-align: justify; line-height: normal; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This paper considers the effects of restricting capital outflows on foreign investment in a developing country. It is shown that a developing country may restrict capital outflows if domestic economic conditions are poor, and it may liberalize capital outflows if domestic economic conditions are strong. Restricting capital outflows has large impact if the investment horizon is short. Furthermore, restricting capital outflows may discourage foreign investors from investing in the developing country. This result is consistent with the home equity bias.</span></span></p>

scholarly journals Investor Protection, Equity Returns, and Financial Globalization

2009 ◽  
Vol 45 (1) ◽  
pp. 135-168 ◽  
Author(s):  
Mariassunta Giannetti ◽  
Yrjö Koskinen
Keyword(s):  
Stock Returns ◽  
Stock Price ◽  
Investor Protection ◽  
Portfolio Allocation ◽  
Equity Returns ◽  
Expected Returns ◽  
Home Equity ◽  
Controlling Shareholders ◽  
Home Equity Bias ◽  
Allocation Decisions

AbstractWe study the effects of investor protection on stock returns and portfolio allocation decisions. In our theoretical model, if investor protection is weak, wealthy investors have an incentive to become controlling shareholders. In equilibrium, the stock price reflects the demand from both controlling shareholders and portfolio investors. Due to the high demand from controlling shareholders, the price of weak corporate governance stocks is not low enough to fully discount the extraction of private benefits. Thus, stocks have lower expected returns when investor protection is weak. This has implications for domestic and foreign investors’ stockholdings. In particular, we show that portfolio investors’ participation in the domestic stock market and home equity bias are positively related to investor protection and provide original evidence in their support.

Multinational Production, Risk Sharing, and Home Equity Bias

2018 ◽  
Author(s):  
Fabio Pietro Ghironi ◽  
Marketa Wolfe
Keyword(s):  
Risk Sharing ◽  
Home Equity ◽  
Production Risk ◽  
Home Equity Bias ◽  
Multinational Production

Home Equity Bias and Industry Concentration

2007 ◽  
Author(s):  
Miguel A. Ferreira ◽  
Antonio F. Miguel
Keyword(s):  
Industry Concentration ◽  
Home Equity ◽  
Home Equity Bias

scholarly journals Effects of underdeveloped equity market on investment

2007 ◽  
Vol 4 (4) ◽  
pp. 164-172
Author(s):  
Mark L. Muzere
Keyword(s):  
Market Economy ◽  
Asset Prices ◽  
Equity Market ◽  
Market Development ◽  
Open Market ◽  
Home Equity ◽  
Home Equity Bias

This paper uses a variant of the Allen, Bernardo, and Welch (2000) model in an open market economy to analyze the effects of equity market development on investment. A country’s underdeveloped equity market may discourage investors from investing in the country. Consequently, an underdeveloped equity market may contribute to home equity bias. Asset prices in a less developed equity market tend to be lower. The results suggest that a government may need to facilitate the development of its equity market to attract investment

scholarly journals Does Asymmetric Information Cause the Home Equity Bias?

2005 ◽  
Author(s):  
Claudio Bravo-Ortega
Keyword(s):  
Asymmetric Information ◽  
Home Equity ◽  
Home Equity Bias

scholarly journals Home Equity Bias

2018 ◽  
Vol 1 (1) ◽  
pp. 40
Author(s):  
Ume Salma Akbar ◽  
Mubasher Ali Jamro ◽  
Zulfiquar Ali Shah
Keyword(s):  
Developing Countries ◽  
Random Effect ◽  
Home Bias ◽  
World Market ◽  
Local Market ◽  
Panel Regression ◽  
Contributing Factors ◽  
Home Equity ◽  
Home Equity Bias ◽  
Trade Opening

This study is aimed to investigate the factors that are intended to lessen the home equity bias or became a base for foreign diversification. By using the foreign diversification of twenty-one developing countries over a period of ten years and incorporating the effect of nine important variables for exploring their effect on home bias. The results from Random effect panel regression shows a diminishing trend of investors towards home equity biasness and the contributing factors for lessening this bias are local market share in world market capitalization and information available to investors and trade opening.

scholarly journals Liberalism and Home Equity Bias

2009 ◽  
Author(s):  
Evangelos Benos ◽  
Marek Jochec
Keyword(s):  
Home Equity ◽  
Home Equity Bias
Sign in / Sign up

Export Citation Format

Share Document