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?:abstract
  • Using a comprehensive international dataset of institutional investor holdings, we study social trust as a source of institutional investment biases. Our findings indicate that national trust-levels affect the investment allocation of institutional investors between domestic and foreign equity markets. Specifically, we document that institutional investors from low-trust countries hold disproportionally larger fractions of their portfolio in domestic equities. This relation holds after controlling for institutional, political, and cultural factors that are known to affect institutional investment choice. Exploiting the heterogeneity in information cost across investor groups as well as events of exogenous variation in information asymmetries at the global level, we show that information asymmetries are the primary channel linking trust and investment decisions. In fact, trust seems to be of particular importance if information asymmetries on the international equity markets are high. Consistent with these findings, we further document that trust also affects the foreign bias in institutional equity portfolios. All findings are robust to alternative measures of social trust. (xsd:string)
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  • https://dx.doi.org/10.2139/ssrn.3651533. (EVS) (xsd:string)
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  • EVS-Bibliography (xsd:string)
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  • 2020 (xsd:gyear)
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  • 2020 (xsd:gyear)
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  • 10.2139/ssrn.3651533 ()
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  • english (xsd:string)
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  • Social Trust and Institutional Investment Biases (xsd:string)
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  • techreport (xsd:string)
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  • Bibsonomy (xsd:string)
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  • European Values Study (EVS) (xsd:string)
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  • 2020 (xsd:string)
  • EVS (xsd:string)
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