The only game in town: Stock-price consequences of local bias

• 成果类型: Article
• 署名作者: Hong, Harrison; Kubik, Jeffrey D.; Stein, Jeremy C.
• 署名单位: Princeton University; Syracuse University; Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.11.006
• 发表日期: 2008
• 页码: 20-37
• 关键词: Local bias; Segmented markets

摘要

Theory suggests that, in the presence of local bias, the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region. Using data on U.S. states and Census regions, we find clear-cut support for this proposition. Most of the variation in the ratio of interest comes from differences across regions in aggregate book value Per capita. Regions with low population density-e.g., the Deep South-are home to relatively few firms per capita, which leads to higher stock prices via an only-game-in-town effect. (c) 2008 Elsevier B.V. All rights reserved.