What drives home bias? Evidence from fund managers' views
✍ Scribed by Torben Lütje; Lukas Menkhoff
- Book ID
- 102277326
- Publisher
- John Wiley and Sons
- Year
- 2007
- Tongue
- English
- Weight
- 213 KB
- Volume
- 12
- Category
- Article
- ISSN
- 1076-9307
- DOI
- 10.1002/ijfe.309
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
A new survey of fund managers reveals home bias for these sophisticated investors in a setting being unrestricted by customer preferences or legal requirements. We confirm informational and behavioural determinants of home bias and find them to hold simultaneously. Further examinations of potential characteristics of home biased fund managers show that the perceived informational advantage does not need to be valid. Multivariate analyses indicate home bias being related to relative return optimism, overconfidence, higher age, lower bonus and less experience. Therefore, behavioural determinants contribute usefully towards an explanation of the home bias puzzle. Copyright © 2007 John Wiley & Sons, Ltd.