In this paper, I explore the determinants of foreign bias in international portfolio investment focusing on a behavioral explanation. Specifically, I investigate whether investors having a stronger uncertainty aversion perceive a foreign country to be more unfamiliar than those with less such...

We study how investor's persistent preference to invest more in the home market — “home bias” — is affecting investor's efforts to mitigate risks associated with climate change. When investors have a tendency to tilt their portfolio towards domestic assets, the carbon intensity in the...

We investigate the extent to which investors exhibit carbon home bias: disproportionate investment in carbon-intensive firms from the home market. We utilize a comprehensive stock-level holdings dataset of European investors to understand the relationship between carbon home bias, divestment and...

In the last decade, the Foreign Institutional Investor (FII) flows have increased almost twenty times and attained shares of thirteen and six percent in the National Stock Exchange and Bombay Stock Exchanges respectively in the cash segment of the Indian equity market. This raises the issue of...

This paper examines institutions' portfolio allocation and performance in US securities. We test how information immobility, proxied by market correlation and cultural and geographical distance between the investors' home markets and the US, influences portfolio strategies. Consistent with...

This paper examines foreign institutional investors' portfolio allocation and performance in U.S. securities. We test how information immobility, proxied by cultural and geographical distance between the investors' home markets and the U.S., influences portfolio strategies. Consistent with...

Empirical studies document that investors typically deviate significantly from a globally market value weighted portfolio, concentrating their portfolio holdings in securities domiciled in their home country and in familiar foreign markets. Evidence that home country concentration stems from an...

This paper examines the problem of information asymmetry between foreign, local, institutional and individual investors on the Bucharest Stock Exchange (BVB) for the period 2004-2011. Using monthly returns for individual companies listed on BVB, stock market indices during the seven years...

This paper uses a unique security-level data set to demonstrate that foreign institutional investors shift their U.S. corporate bond portfolios toward bonds with higher credit spreads when U.S. monetary policy tightens, which reflects institutional factors related to nominal return targets and...

We use the European Central Bank's new and detailed database of European equity holdings by households to test two competing theories of international biases in equity portfolios, viz. that they reflect either informational advantages or familiarity bias. The database allows lookthrough handling...