Clustering Fosters Investment: Local Agglomeration and Household Portfolio Choice

34 Pages Posted: 31 Jan 2017 Last revised: 14 Mar 2018

Jawad M. Addoum

Cornell University

Stefanos Delikouras

University of Miami - Department of Finance

Da Ke

University of South Carolina

George M. Korniotis

University of Miami

Date Written: March 11, 2018

Abstract

We investigate the impact of local agglomeration economies on household portfolio choice. Using microdata from U.S. household surveys, we document that when the industry in which individuals work is locally agglomerated, they are more likely to invest in risky assets. This pattern is best explained by industry clusters enhancing human capital and in turn, raising workers' allocations to risky assets. Our analysis underscores the role of geography in shaping household financial decisions.

Keywords: local agglomeration, household portfolio choice, human capital

JEL Classification: G11, J24, R23

Suggested Citation

Addoum, Jawad M. and Delikouras, Stefanos and Ke, Da and Korniotis, George M., Clustering Fosters Investment: Local Agglomeration and Household Portfolio Choice (March 11, 2018). Available at SSRN: https://ssrn.com/abstract=2909168 or http://dx.doi.org/10.2139/ssrn.2909168

Jawad M. Addoum

Cornell University ( email )

Ithaca, NY 14853
United States

Stefanos Delikouras

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

Da Ke

University of South Carolina ( email )

1014 Greene Street
Columbia, SC 29208
United States
(803) 576-5701 (Phone)

HOME PAGE: http://www.dakefinance.com

George M. Korniotis (Contact Author)

University of Miami ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States
305-284-5728 (Phone)

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