Home Biased Analysts in Emerging Markets PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Home Biased Analysts in Emerging Markets PDF full book. Access full book title Home Biased Analysts in Emerging Markets by Sandy Lai. Download full books in PDF and EPUB format.
Author: Sandy Lai
Publisher:
ISBN:
Category :
Languages : en
Pages : 45
Get Book Here
Book Description
We find that local analyst recommendations are systematically more optimistic than foreign analyst recommendations in emerging markets. The effects of this novel quot;home biasquot; among local analysts overwhelm any information asymmetry between foreign and local analysts. Consequently, local analyst upgrades underperform foreign analyst upgrades, while local analyst downgrades outperform foreign analyst downgrades. Neither foreign investors, local institutions, nor retail investors appear to be fully cognizant of this bias. Trade reactions suggest that foreign investors overestimate the bias in foreign analyst recommendations while local institutions underestimate the bias in local analyst recommendations. These results are pervasive across countries, time periods, and stock groupings, and can be traced to investment banking pressure.
Author: Sandy Lai
Publisher:
ISBN:
Category :
Languages : en
Pages : 45
Get Book Here
Book Description
We find that local analyst recommendations are systematically more optimistic than foreign analyst recommendations in emerging markets. The effects of this novel quot;home biasquot; among local analysts overwhelm any information asymmetry between foreign and local analysts. Consequently, local analyst upgrades underperform foreign analyst upgrades, while local analyst downgrades outperform foreign analyst downgrades. Neither foreign investors, local institutions, nor retail investors appear to be fully cognizant of this bias. Trade reactions suggest that foreign investors overestimate the bias in foreign analyst recommendations while local institutions underestimate the bias in local analyst recommendations. These results are pervasive across countries, time periods, and stock groupings, and can be traced to investment banking pressure.
Author: Hali J. Edison
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
We analyze a unique data set and uncover a remarkable result that casts a new light on the home bias phenomenon. The data are comprehensive, security-level holdings of emerging market equities by U.S. investors. We document, as expected, that at a point in time U.S. portfolios are tilted towards firms that are large, have fewer restrictions on foreign ownership, or are cross-listed on a U.S. exchange. The size of the cross-listing effect is striking. In contrast to the well-documented underweighting of foreign stocks, emerging market equities that are cross-listed on a U.S. exchange are incorporated into U.S. portfolios at full international CAPM weights. Our resultssuggest that information asymmetries play an important role in equity home bias and that the benefits of international risk sharing are limited to select firms.
Author: Kavous Ardalan
Publisher: Routledge
ISBN: 1000008274
Category : Business & Economics
Languages : en
Pages : 393
Get Book Here
Book Description
This book provides a comprehensive and critical analysis of research outcomes on the equity home bias puzzle – that people overinvest in domestic stocks relative to the theoretically optimal investment portfolio. It introduces place attachment – the bonding that occurs between individuals and their meaningful environments – as a new explanation for equity home bias, and presents a philosophically multi-paradigmatic view of place attachment. For the first time, a comprehensive and up-to-date review of the extant literature is provided, demonstrating that place attachment is a contributing factor to 22 different topics in which variations of home bias are present. The author also analyses the social-psychological underpinnings of place attachment, and considers the effect of multi-culturalism on the future of equity home bias. The book’s unique approach discusses the issues in conceptual terms rather than through data and statistical methods. This multi- and inter-disciplinary book is an invaluable resource for graduate students and researchers interested in economics, finance, philosophy, and/or methodology, introducing them to a new line of research.
Author: Ms.Hali J. Edison
Publisher: International Monetary Fund
ISBN: 1451875762
Category : Business & Economics
Languages : en
Pages : 33
Get Book Here
Book Description
We analyze a unique data set and uncover a remarkable result that casts a new light on the home bias phenomenon. The data are comprehensive, security-level holdings of emerging market equities by U.S. investors. We document, as expected, that at a point in time U.S. portfolios are tilted towards firms that are large, have fewer restrictions on foreign ownership, or are cross-listed on a U.S. exchange. The size of the cross-listing effect is striking. In contrast to the well-documented underweighting of foreign stocks, emerging market equities that are cross-listed on a U.S. exchange are incorporated into U.S. portfolios at full international capital asset pricing model (CAPM) weights. Our results suggest that information asymmetries play an important role in equity home bias and that the benefits of international risk sharing are limited to select firms.
Author: Charles Chang
Publisher:
ISBN:
Category :
Languages : en
Pages : 244
Get Book Here
Book Description
Author: Dalia M. Reda El-Edel
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
Author: Reena Aggarwal
Publisher: World Bank Publications
ISBN:
Category : Foreign exchange
Languages : en
Pages : 47
Get Book Here
Book Description
Author: Ian Cooper
Publisher:
ISBN: 9781601987631
Category : International finance
Languages : en
Pages : 133
Get Book Here
Book Description
Home bias - the empirical phenomenon that investors assign anomalously high weights to their own domestic assets - has puzzled academics for decades: financial theory predicts that an internationally well diversified portfolio of stocks and short-term bonds can reduce risk significantly without affecting expected return. Although the globalization of international equity markets has increased international investments, equity portfolios remain severely home biased today, and no single explanation seems to solve the puzzle completely. In this paper, we first provide a thorough description of the equity home bias phenomenon by defining, discussing, and applying the competing measures and presenting some estimates of the costs of under-diversification. Second, we evaluate the explanations for the equity home bias proposed in the literature such as information asymmetries, behavioral aspects, barriers to foreign investment, and governance issues, and conclude that each explanation on its own falls short, suggesting that the equity home bias probably reflects a combination of factors. Lastly, we review the implications of international under-diversification for portfolio formation and the cost of capital of companies.
Author: G. Andrew Karolyi
Publisher: Oxford University Press, USA
ISBN: 0199336628
Category : Business & Economics
Languages : en
Pages : 313
Get Book Here
Book Description
Cracking the Emerging Markets Enigma outlines a rigorous, comprehensive, and practical framework for evaluating the opportunities and, more importantly, the risks of investing in emerging markets. Built on a foundation of sound research on foreign direct and portfolio capital flows, Andrew Karolyi's proposed system of evaluation incorporates multiple dimensions of the potential risks faced by prospective investors in an empirically coherent framework.
Author: Amir Andrew Amadi
Publisher:
ISBN:
Category :
Languages : en
Pages : 37
Get Book Here
Book Description
The presence of home bias in equity portfolios has been a focus of the international finance literature for the past couple of decades. Recent developments and data collections, however, offer some insight into understanding the equity home bias phenomenon. This paper first demonstrates that there has been a distinct reduction equity home bias in recent years. It then examines if any of the prominent theoretical explanations or recent developments such as free trade and globalization, the advent the internet, and the rise of emerging markets and mutual fund investment have affected the increase in foreign diversification. The empirical analysis produces some interesting results. It demonstrates that the rise of the internet and mutual fund investment have indeed affected the changes in foreign diversification, supporting an information-asymmetries explanation. The results also indicate that other factors such as market size, which intuitively might be expected to affect foreign diversification, are insignificant.
