Home Advantage: Local Investors and Information Type

53 Pages Posted: 19 Nov 2021 Last revised: 17 Jul 2023

See all articles by Howard Jones

Howard Jones

University of Oxford, Saïd Business School

Jose Vicente Martinez

University of Connecticut

Matthias Qian

University of Oxford

Date Written: July 17, 2023

Abstract

Research suggests that investors closest to companies have an advantage in acquiring or processing information about them. We investigate whether this advantage is affected by the type of information (company-specific, country-specific, or world). Using Brazilian companies simultaneously traded in São Paulo and New York, we find that local investors’ information advantage increases on days when most information is company-specific and is more pronounced for more local, less international firms. On days when the price swings are not company-specific, this is not the case and, if anything, it is global investors’ information advantage that increases.

Keywords: Geographic location, Information asymmetry, Information type, Local and global investors

JEL Classification: G14, G15, G20

Suggested Citation

Jones, Howard and Martinez, Jose Vicente and Qian, Matthias, Home Advantage: Local Investors and Information Type (July 17, 2023). Available at SSRN: https://ssrn.com/abstract=3946491 or http://dx.doi.org/10.2139/ssrn.3946491

Howard Jones

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

HOME PAGE: http://www.sbs.ox.ac.uk/about-us/people/howard-jones

Jose Vicente Martinez (Contact Author)

University of Connecticut ( email )

2100 Hillside Road, Unit 1041
Storrs, CT 06269
United States

HOME PAGE: http://https://www.business.uconn.edu/person/jose-martinez/

Matthias Qian

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 7958 921145 (Phone)
OX1 1HP (Fax)

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