Equity Home Bias: A Review Essay

Ardalan, Kavous

doi:10.1111/joes.12302

Cited by 42 publications

(19 citation statements)

References 157 publications

(226 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, it should always be taken into account that the differentiation between correlations and causalities in the considered studies is crucial. The absolute difference in cited studies compared to the literature reviews of both Coeurdacier and Rey (2013) and Ardalan (2019) strengthens the limitation. Apart from the described limitations of the method of literature search, it has to be mentioned again that all types of grey literature are not included in this review.…”

Section: Literature Selectionmentioning

confidence: 86%

“…There are many reviews about home bias (Lewis 1999 ; Wolf 2000 ; Coeurdacier and Rey 2013 ; Ardalan 2019 ). The reviews of Lewis ( 1999 ) and Wolf ( 2000 ) are dated back two decades and often examined home bias in consumption as well.…”

Section: Introductionmentioning

confidence: 99%

“…In the case, that both questions have to be answered positively then financial advisors in banks but also the new robo advisors should address this issue to support investors in overcoming the otherwise biased investment behaviour. Compared to the more recent reviews by Coeurdacier and Rey ( 2013 ) and Ardalan ( 2019 ) the contribution to research of this review can be defined from two sides. First, the studies and papers incorporated in this review differ significantly from the two mentioned and a large part has not been included in the previous reviews.…”

Section: Introductionmentioning

confidence: 99%

“…This is partly due to the method of literature selection and partly based on the fact that mainly studies explicitly elaborating home bias are included in this review. Second, the approach of this review is more comprehensive and grasps the broad picture of home bias, especially referring to Ardalan ( 2019 ). Whereas Ardalan ( 2019 ) exclusively reviews the reasons of home bias encyclopaedically, this paper reviews various measurements, the reasons and implications of home bias.…”

Section: Introductionmentioning

confidence: 99%

“…Second, the approach of this review is more comprehensive and grasps the broad picture of home bias, especially referring to Ardalan ( 2019 ). Whereas Ardalan ( 2019 ) exclusively reviews the reasons of home bias encyclopaedically, this paper reviews various measurements, the reasons and implications of home bias. On top of that, the study differentiates between home bias and local bias and simultaneously integrates both.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The home bias and the local bias: A survey

2020

View full text Add to dashboard Cite

The home bias like the disposition effect is a well-researched economic phenomenon in investor behaviour which has been examined in finance journal articles for decades. While there is little doubt about the existence of the bias, its magnitude varies across countries and investor groups. The home bias has to be regarded as a multifactorial phenomenon, a combination of numerous causes which all synergistically contribute. In contrast to other biases the home bias can at least partially be explained by reasons beyond irrational investor behaviour. While institutional restrictions play a minor role, informational asymmetries and superior information of domestic investors are important factors. Thus, the performance of investments may well benefit from a home bias, and the bias then no longer would be a puzzle but rather rational behaviour as a lower diversification level may lead to higher returns. The contemporary understanding of the home bias gains in relevance as the ongoing political debate in Germany has to clarify an institutional framework for long-run retirement savings plans of private households based on equity investments.

show abstract

Section: Literature Selectionmentioning

confidence: 86%