It is an established fact that investors favor the familiar--be it domestic securities or, within a country, the securities of nearby firms--and avoid investments that would provide the greatest diversification benefits. While we do not rule out familiarity as an important driver of portfolio...

Africa's economic performance has been widely viewed with pessimism. In this paper, we use firm-level data for around 80 countries to examine formal firm performance. Without controls, manufacturing African firms perform significantly worse than firms in other regions. They have lower...