Understanding the Equity Home Bias: Evidence from Survey Data

Strong, Norman C.; Xu, Xinzhong

doi:10.2139/ssrn.191401

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

See all articles by Norman C. Strong

Norman C. Strong

University of Manchester - Alliance 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: Suggested Citation

Strong, Norman Charles and Xu, Gary 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