Understanding the Equity Home Bias: Evidence from Survey Data

Norman Strong; Xinzhong Xu

doi:10.1162/003465303765299837

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Understanding the Equity Home Bias: Evidence from Survey Data

Norman Strong¹; Xinzhong Xu²

¹ University of Manchester · ² Peking University

The Review of Economics and Statistics 2003

This study uses survey data of fund managers' views on prospects for international equity markets to shed light on why investment portfolios are significantly biased towards domestic equities. We find that fund managers from the United States, the United Kingdom, continental Europe, and Japan show a significant relative optimism towards their home equity market. Where institutional factors have largely failed to explain the puzzle, our evidence lends support to behavioral explanations of the bias.

DOI: 10.1162/003465303765299837
Volume: 85 (2)
Pages: 307-312
Language: en
Export: BibTeX
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