Home bias in foreign investment decisions

• 成果类型: Article
• 署名作者: Ke, Dongmin; Ng, Lilian; Wang, Qinghai
• 署名单位: University of Wisconsin System; University of Wisconsin Milwaukee; Kean University; University System of Georgia; Georgia Institute of Technology
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/jibs.2009.48
• 发表日期: 2010
• 页码: 960-979
• 关键词: logistic regression; Foreign portfolio investment; Mutual funds

摘要

We analyze the US equity holdings of more than 3000 non-US-based mutual funds from 22 countries and find robust evidence that fund managers strongly prefer to invest in stocks of US firms that have presence in their home country. This home bias is independent of the degree of global involvement and visibility of these US firms. While these firms have significantly greater exposure to local equity markets, their local presence offers little information advantage to local fund managers. Our findings suggest that the lack of international diversification is more serious than currently documented in the literature. Journal of International Business Studies (2010) 41, 960-979. doi:10.1057/jibs.2009.48