Quantitative Implications Of The Home Bias

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Quantitative Implications of the Home Bias

Author : Assaf Razin
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.3/5 (243 download)

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Book Synopsis Quantitative Implications of the Home Bias by : Assaf Razin

Download or read book Quantitative Implications of the Home Bias written by Assaf Razin and published by . This book was released on 1997 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is strong evidence about a home-court advantage in international portfolio" investment. One explanation for the bias is an information asymmetry between domestic and" foreign investors about the economic performance of domestic firms. This asymmetry causes" two types of distortions: an aggregate production inefficiency and a production-consumption" inefficiency, leading to foreign underinvestment and domestic oversaving respectively. Such" market failures are found to be quite severe, slightly more so with equity flows than with debt" flows. These inefficiencies can nonetheless be corrected by a mix of tax-subsidy instruments consisting of taxes on corporate income and on the capital incomes of both residents and" nonresidents. When only a partial set of instruments is available, however each tax instrument can change radically and may even be reversed although the welfare gains" can be fairly substantial and sometimes close to the first best optimum. This partial set of" instruments appears to be more effective in handling the market failure in the case of equity" flows than in the case of debt flows.

The Equity Home Bias Puzzle

Author : Ian Cooper
Publisher :
ISBN 13 : 9781601987631
Total Pages : 133 pages
Book Rating : 4.9/5 (876 download)

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Book Synopsis The Equity Home Bias Puzzle by : Ian Cooper

Download or read book The Equity Home Bias Puzzle written by Ian Cooper and published by . This book was released on 2013 with total page 133 pages. Available in PDF, EPUB and Kindle. Book excerpt: Home bias - the empirical phenomenon that investors assign anomalously high weights to their own domestic assets - has puzzled academics for decades: financial theory predicts that an internationally well diversified portfolio of stocks and short-term bonds can reduce risk significantly without affecting expected return. Although the globalization of international equity markets has increased international investments, equity portfolios remain severely home biased today, and no single explanation seems to solve the puzzle completely. In this paper, we first provide a thorough description of the equity home bias phenomenon by defining, discussing, and applying the competing measures and presenting some estimates of the costs of under-diversification. Second, we evaluate the explanations for the equity home bias proposed in the literature such as information asymmetries, behavioral aspects, barriers to foreign investment, and governance issues, and conclude that each explanation on its own falls short, suggesting that the equity home bias probably reflects a combination of factors. Lastly, we review the implications of international under-diversification for portfolio formation and the cost of capital of companies.

Equity Home Bias in International Finance

Author : Kavous Ardalan
Publisher : Routledge
ISBN 13 : 1000008274
Total Pages : 362 pages
Book Rating : 4.0/5 ( download)

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Book Synopsis Equity Home Bias in International Finance by : Kavous Ardalan

Download or read book Equity Home Bias in International Finance written by Kavous Ardalan and published by Routledge. This book was released on 2019-05-17 with total page 362 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive and critical analysis of research outcomes on the equity home bias puzzle – that people overinvest in domestic stocks relative to the theoretically optimal investment portfolio. It introduces place attachment – the bonding that occurs between individuals and their meaningful environments – as a new explanation for equity home bias, and presents a philosophically multi-paradigmatic view of place attachment. For the first time, a comprehensive and up-to-date review of the extant literature is provided, demonstrating that place attachment is a contributing factor to 22 different topics in which variations of home bias are present. The author also analyses the social-psychological underpinnings of place attachment, and considers the effect of multi-culturalism on the future of equity home bias. The book’s unique approach discusses the issues in conceptual terms rather than through data and statistical methods. This multi- and inter-disciplinary book is an invaluable resource for graduate students and researchers interested in economics, finance, philosophy, and/or methodology, introducing them to a new line of research.

Coordinated Portfolio investment Survey

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1455216569
Total Pages : 180 pages
Book Rating : 4.4/5 (552 download)

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Book Synopsis Coordinated Portfolio investment Survey by : International Monetary Fund

Download or read book Coordinated Portfolio investment Survey written by International Monetary Fund and published by International Monetary Fund. This book was released on 1997-01-01 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a coordinated portfolio investment survey guide provided to assist national compilers in the conduct of the Coordinated Portfolio Investment Survey, conducted under the auspices of the IMF with reference to the year-end 1997. The guide covers a variety of conceptual issues that a country must address when conducting a survey. It also covers the practical issues associated with preparing for a national survey. These include setting a timetable, taking account of the legal and confidentiality issues raised, developing a mailing list, and maintaining quality control checks.

Investor Behavior

Author : H. Kent Baker
Publisher : John Wiley & Sons
ISBN 13 : 1118492986
Total Pages : 645 pages
Book Rating : 4.1/5 (184 download)

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Book Synopsis Investor Behavior by : H. Kent Baker

Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

Handbook of the Economics of Finance

Author : G. Constantinides
Publisher : Elsevier
ISBN 13 : 9780444513632
Total Pages : 698 pages
Book Rating : 4.5/5 (136 download)

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Book Synopsis Handbook of the Economics of Finance by : G. Constantinides

Download or read book Handbook of the Economics of Finance written by G. Constantinides and published by Elsevier. This book was released on 2003-11-04 with total page 698 pages. Available in PDF, EPUB and Kindle. Book excerpt: Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton.

International Home Bias in International Finance and Business Cycles

Author : Karen K. Lewis
Publisher :
ISBN 13 :
Total Pages : 80 pages
Book Rating : 4.3/5 (243 download)

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Book Synopsis International Home Bias in International Finance and Business Cycles by : Karen K. Lewis

Download or read book International Home Bias in International Finance and Business Cycles written by Karen K. Lewis and published by . This book was released on 1998 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: Domestic investors hold a substantially larger proportion of their wealth portfolios in domestic assets than standard portfolio theory would suggest. This phenomenon has been called equity home bias. In the absence of this home bias, investors would optimally diversify away domestic output risk. Therefore, in a world without investor home bias, consumption growth rates would tend to comove across countries even when output growth rates do not. Empirically, however, consumption growth rates tend to have a lower correlation across countries than do output growth rates. Moreover, consumption growth in each country appears to be highly correlated with its own output growth relative to the world. This phenomenon may be called consumption home bias. In this paper, I evaluate existing explanations for these two types of home bias.

Portfolio Selection and Asset Pricing

Author : Shouyang Wang
Publisher : Springer Science & Business Media
ISBN 13 : 3642559344
Total Pages : 260 pages
Book Rating : 4.6/5 (425 download)

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Book Synopsis Portfolio Selection and Asset Pricing by : Shouyang Wang

Download or read book Portfolio Selection and Asset Pricing written by Shouyang Wang and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: In our daily life, almost every family owns a portfolio of assets. This portfolio could contain real assets such as a car, or a house, as well as financial assets such as stocks, bonds or futures. Portfolio theory deals with how to form a satisfied portfolio among an enormous number of assets. Originally proposed by H. Markowtiz in 1952, the mean-variance methodology for portfolio optimization has been central to the research activities in this area and has served as a basis for the development of modem financial theory during the past four decades. Follow-on work with this approach has born much fruit for this field of study. Among all those research fruits, the most important is the capital asset pricing model (CAPM) proposed by Sharpe in 1964. This model greatly simplifies the input for portfolio selection and makes the mean-variance methodology into a practical application. Consequently, lots of models were proposed to price the capital assets. In this book, some of the most important progresses in portfolio theory are surveyed and a few new models for portfolio selection are presented. Models for asset pricing are illustrated and the empirical tests of CAPM for China's stock markets are made. The first chapter surveys ideas and principles of modeling the investment decision process of economic agents. It starts with the Markowitz criteria of formulating return and risk as mean and variance and then looks into other related criteria which are based on probability assumptions on future prices of securities.

Handbook on Impact Evaluation

Author : Shahidur R. Khandker
Publisher : World Bank Publications
ISBN 13 : 082138029X
Total Pages : 262 pages
Book Rating : 4.8/5 (213 download)

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Book Synopsis Handbook on Impact Evaluation by : Shahidur R. Khandker

Download or read book Handbook on Impact Evaluation written by Shahidur R. Khandker and published by World Bank Publications. This book was released on 2009-10-13 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public programs are designed to reach certain goals and beneficiaries. Methods to understand whether such programs actually work, as well as the level and nature of impacts on intended beneficiaries, are main themes of this book.

Portfolio Preferences of Foreign Institutional Investors

Author : Reena Aggarwal
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4./5 ( download)

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Book Synopsis Portfolio Preferences of Foreign Institutional Investors by : Reena Aggarwal

Download or read book Portfolio Preferences of Foreign Institutional Investors written by Reena Aggarwal and published by World Bank Publications. This book was released on 2003 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Financial Consequences of Behavioural Biases

Author : Imad A. Moosa
Publisher : Springer
ISBN 13 : 3319693891
Total Pages : 184 pages
Book Rating : 4.3/5 (196 download)

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Book Synopsis The Financial Consequences of Behavioural Biases by : Imad A. Moosa

Download or read book The Financial Consequences of Behavioural Biases written by Imad A. Moosa and published by Springer. This book was released on 2017-10-25 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a concise analysis of behavioural biases and their implications for financial decision making. The book is written in the normative tradition, arguing strongly for the superiority of behavioural finance with respect to explaining observed phenomena in financial markets. It offers some unique features, including a discussion of the issue of conspiracy theory and how behavioural biases lead to belief in conspiracy theories. Lingering belief in the principles of neoclassical finance is attributed in part to the doctrine of publish or perish, which dominates contemporary academia. The offshoots of behavioural finance are discussed in detail, including ecological finance, environmental finance, social finance, experimental finance, neurofinance, and emotional finance. A comprehensive discussion of narcissism is presented where it is demonstrated that narcissistic behaviour is prevalent in the finance industry and that it led to the eruption of the global financial crisis.

Working Paper Series

Author :
Publisher :
ISBN 13 :
Total Pages : 598 pages
Book Rating : 4.F/5 ( download)

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Book Synopsis Working Paper Series by :

Download or read book Working Paper Series written by and published by . This book was released on 1998 with total page 598 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Communities in Action

Author : National Academies of Sciences, Engineering, and Medicine
Publisher : National Academies Press
ISBN 13 : 0309452961
Total Pages : 583 pages
Book Rating : 4.3/5 (94 download)

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Book Synopsis Communities in Action by : National Academies of Sciences, Engineering, and Medicine

Download or read book Communities in Action written by National Academies of Sciences, Engineering, and Medicine and published by National Academies Press. This book was released on 2017-04-27 with total page 583 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.

International Diversification at Home and Abroad

Author : Fang Cai
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis International Diversification at Home and Abroad by : Fang Cai

Download or read book International Diversification at Home and Abroad written by Fang Cai and published by . This book was released on 2007 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is an established fact that investors favor the familiar%u2014be it domestic securities or, within a country, the securities of nearby firms%u2014and avoid investments that would provide the greatest diversification benefits. While we do not rule out familiarity as an important driver of portfolio allocations, we provide new evidence of investors%u2019 international diversification motive. In particular, our analysis of the security-level U.S. equity holdings of foreign and domestic institutional investors indicates that institutional investors reveal a preference for domestic multinationals (MNCs), even after controlling for familiarity factors. We attribute this revealed preference to the desire to obtain %u201Csafe%u201D international diversification. We then show that holdings of domestic MNCs are substantial and, after accounting for this home-grown foreign exposure, that the share of %u201Cforeign%u201D equities in investors%u2019 portfolios roughly doubles, reducing (but not eliminating) the observed home bias.

Equity Home Bias

Author : Adam Hantak
Publisher : diplom.de
ISBN 13 : 3842821530
Total Pages : 76 pages
Book Rating : 4.8/5 (428 download)

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Book Synopsis Equity Home Bias by : Adam Hantak

Download or read book Equity Home Bias written by Adam Hantak and published by diplom.de. This book was released on 2011-10-20 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inhaltsangabe:Introduction: Every investor faces the challenge of making the right investment decisions. Upon analysing the allocation of wealth among countries, it becomes evident that investors do not invest their financial wealth internationally, but tend to invest the majority of their wealth in domestic equity. Financial theory deems this behaviour irrational, since holding a domestic portfolio is considered to be suboptimal due to the foregone benefits of international diversification. Assuming that the financial theory is right in this prediction, the question as to what are the causes for this irrational behaviour comes to mind and forms the focal point of this work. One the one hand, investors may be well aware of the costs connected with holding a domestic portfolio. Market restrictions, however, do not allow investors to attain the optimal international portfolio. On the other hand, investors may be unaware of the benefits of international diversification, and instead have a preference for domestic equity and fail to perceive the domestic portfolio as suboptimal. The traditional financial theory for this behaviour provides the institutional explanations with the focus on market imperfections and the behavioural financial theory provides explanations with the focus on investor irrationality. Following this classification of both theories, this work briefly reviews institutional explanations, as many of them lack empirical evidence and concentrates mainly on the behavioural explanations, as they are the focal point of current research and find wide empirical support. After defining equity home bias and related concepts in Chapter 2, the costs of equity home bias are discussed in Chapter 3. In Chapter 4, institutional explanations are considered. Section 4.1 reviews briefly a number of older institutional explanations, such as direct investment barriers, transactions costs and taxes, as they do not find much empirical support. Section 4.2 explores in more detail an explanation based on information asymmetry, as it may at least partially contribute to the solution of the home bias problem. With the emergence and acceptance of behavioural finance new explanations based on irrationality of investors were advanced and are presented in Chapter 5. Section 5.1 explores optimistic expectations about domestic markets as one of the early behavioural explanations. Section 5.2 deals with the competence hypothesis and creates a foundation for the [...]

Applying Quantitative Bias Analysis to Epidemiologic Data

Author : Timothy L. Lash
Publisher : Springer Science & Business Media
ISBN 13 : 0387879595
Total Pages : 200 pages
Book Rating : 4.3/5 (878 download)

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Book Synopsis Applying Quantitative Bias Analysis to Epidemiologic Data by : Timothy L. Lash

Download or read book Applying Quantitative Bias Analysis to Epidemiologic Data written by Timothy L. Lash and published by Springer Science & Business Media. This book was released on 2011-04-14 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bias analysis quantifies the influence of systematic error on an epidemiology study’s estimate of association. The fundamental methods of bias analysis in epi- miology have been well described for decades, yet are seldom applied in published presentations of epidemiologic research. More recent advances in bias analysis, such as probabilistic bias analysis, appear even more rarely. We suspect that there are both supply-side and demand-side explanations for the scarcity of bias analysis. On the demand side, journal reviewers and editors seldom request that authors address systematic error aside from listing them as limitations of their particular study. This listing is often accompanied by explanations for why the limitations should not pose much concern. On the supply side, methods for bias analysis receive little attention in most epidemiology curriculums, are often scattered throughout textbooks or absent from them altogether, and cannot be implemented easily using standard statistical computing software. Our objective in this text is to reduce these supply-side barriers, with the hope that demand for quantitative bias analysis will follow.

Handbook of Behavioral Economics - Foundations and Applications 1

Author :
Publisher : Elsevier
ISBN 13 : 0444633898
Total Pages : 749 pages
Book Rating : 4.4/5 (446 download)

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Book Synopsis Handbook of Behavioral Economics - Foundations and Applications 1 by :

Download or read book Handbook of Behavioral Economics - Foundations and Applications 1 written by and published by Elsevier. This book was released on 2018-09-27 with total page 749 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Behavioral Economics: Foundations and Applications presents the concepts and tools of behavioral economics. Its authors are all economists who share a belief that the objective of behavioral economics is to enrich, rather than to destroy or replace, standard economics. They provide authoritative perspectives on the value to economic inquiry of insights gained from psychology. Specific chapters in this first volume cover reference-dependent preferences, asset markets, household finance, corporate finance, public economics, industrial organization, and structural behavioural economics. This Handbook provides authoritative summaries by experts in respective subfields regarding where behavioral economics has been; what it has so far accomplished; and its promise for the future. This taking-stock is just what Behavioral Economics needs at this stage of its so-far successful career. - Helps academic and non-academic economists understand recent, rapid changes in theoretical and empirical advances within behavioral economics - Designed for economists already convinced of the benefits of behavioral economics and mainstream economists who feel threatened by new developments in behavioral economics - Written for those who wish to become quickly acquainted with behavioral economics