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Understanding the Equity Home Bias: Evidence from Survey Data

Lancaster University Management School, Department of Accounting and Finance Working Paper No. 99/017

18 Pages Posted: 9 Dec 1999  

Norman C. Strong

University of Manchester - Manchester Business School

Xinzhong Xu

Peking University - Guanghua School of Management

Date Written: June 1999

Abstract

This study uses survey data of fund managers? views on prospects for international equity markerts to shed light on why investment portfolios are signnificantly biased towards domestic equities. We find that fund managers from the US, the UK, Continental Europe, and Japan show a significant comparative optimism towards their home equity market. Where institutional factors have largely failed to explain the equity home bias puzzle, our evidence lends support to behavioural explanations of the bias.

JEL Classification: D84, F30, G15

Suggested Citation

Strong, Norman C. and Xu, Xinzhong, Understanding the Equity Home Bias: Evidence from Survey Data (June 1999). Lancaster University Management School, Department of Accounting and Finance Working Paper No. 99/017. Available at SSRN: https://ssrn.com/abstract=191401 or http://dx.doi.org/10.2139/ssrn.191401

Norman Charles Strong

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

HOME PAGE: http://www.personal.mbs.ac.uk/nstrong/

Gary Xinzhong Xu (Contact Author)

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

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