The correlation bias refers to the fact that claim subordination in the capital structure of the firm influences claim … shown that the correlation bias shifts shareholder preferences towards highly correlated assets, making financial …

We analyze a unique data set and uncover a remarkable result that casts a new light on the home bias phenomenon. The … play an important role in equity home bias and that the benefits of international risk sharing are limited to select firms …

Most tax systems create a tax bias toward debt finance. Such debt bias increases leverage and may negatively affect … financial stability. This paper models and estimates debt bias in the financial sector, and present novel estimates for … investment banks and non-bank financial intermediaries such as finance and insurance companies. We find debt bias to be pervasive …