Home country bias : does domestic experience help investors enter foreign markets?
Autor(a) principal: | |
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Data de Publicação: | 2011 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/9285 |
Resumo: | This paper investigates the dynamics of individuals’ investments leading up to their decision to make the first investment abroad. We show that investors first invest in domestic securities and only some time later they invest abroad in foreign securities. We also show that investors who trade more often in the domestic market start to invest abroad earlier. Our findings suggest that the experience investors acquire while they trade in the domestic market is a key reason why active investors enter the foreign market earlier. A reason is that highly educated investors as well as investors with more financial knowledge, arguably those for whom learning by trading is the least important, do not need to trade as much in the domestic market before they start investing in foreign securities. Another reason is that investors who start investing in foreign securities are able to improve on their performance afterwards. This improvement in performance constitutes further evidence that the home country bias is costly. |
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Home country bias : does domestic experience help investors enter foreign markets?LearningHome country biasDuration analysisThis paper investigates the dynamics of individuals’ investments leading up to their decision to make the first investment abroad. We show that investors first invest in domestic securities and only some time later they invest abroad in foreign securities. We also show that investors who trade more often in the domestic market start to invest abroad earlier. Our findings suggest that the experience investors acquire while they trade in the domestic market is a key reason why active investors enter the foreign market earlier. A reason is that highly educated investors as well as investors with more financial knowledge, arguably those for whom learning by trading is the least important, do not need to trade as much in the domestic market before they start investing in foreign securities. Another reason is that investors who start investing in foreign securities are able to improve on their performance afterwards. This improvement in performance constitutes further evidence that the home country bias is costly.ElsevierRepositório da Universidade de LisboaAbreu, MargaridaMendes, VictorSantos, João A.C.2015-10-02T13:00:56Z20112011-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/9285engAbreu, Margarida, Victor Mendes e João A.C. Santos (2011). "Home country bias : does domestic experience help investors enter foreign markets?". Journal of Banking & Finance, 35:2330-23400378-4266info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:39:50Zoai:www.repository.utl.pt:10400.5/9285Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T16:56:06.717083Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Home country bias : does domestic experience help investors enter foreign markets? |
title |
Home country bias : does domestic experience help investors enter foreign markets? |
spellingShingle |
Home country bias : does domestic experience help investors enter foreign markets? Abreu, Margarida Learning Home country bias Duration analysis |
title_short |
Home country bias : does domestic experience help investors enter foreign markets? |
title_full |
Home country bias : does domestic experience help investors enter foreign markets? |
title_fullStr |
Home country bias : does domestic experience help investors enter foreign markets? |
title_full_unstemmed |
Home country bias : does domestic experience help investors enter foreign markets? |
title_sort |
Home country bias : does domestic experience help investors enter foreign markets? |
author |
Abreu, Margarida |
author_facet |
Abreu, Margarida Mendes, Victor Santos, João A.C. |
author_role |
author |
author2 |
Mendes, Victor Santos, João A.C. |
author2_role |
author author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Abreu, Margarida Mendes, Victor Santos, João A.C. |
dc.subject.por.fl_str_mv |
Learning Home country bias Duration analysis |
topic |
Learning Home country bias Duration analysis |
description |
This paper investigates the dynamics of individuals’ investments leading up to their decision to make the first investment abroad. We show that investors first invest in domestic securities and only some time later they invest abroad in foreign securities. We also show that investors who trade more often in the domestic market start to invest abroad earlier. Our findings suggest that the experience investors acquire while they trade in the domestic market is a key reason why active investors enter the foreign market earlier. A reason is that highly educated investors as well as investors with more financial knowledge, arguably those for whom learning by trading is the least important, do not need to trade as much in the domestic market before they start investing in foreign securities. Another reason is that investors who start investing in foreign securities are able to improve on their performance afterwards. This improvement in performance constitutes further evidence that the home country bias is costly. |
publishDate |
2011 |
dc.date.none.fl_str_mv |
2011 2011-01-01T00:00:00Z 2015-10-02T13:00:56Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/9285 |
url |
http://hdl.handle.net/10400.5/9285 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Abreu, Margarida, Victor Mendes e João A.C. Santos (2011). "Home country bias : does domestic experience help investors enter foreign markets?". Journal of Banking & Finance, 35:2330-2340 0378-4266 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Elsevier |
publisher.none.fl_str_mv |
Elsevier |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799131043489382400 |