journal6 ›› 2009, Vol. 30 ›› Issue (3): 120-125.

• Economics • Previous Articles     Next Articles

Origins of Formation Mechanism of Investment Behavior of Home Bias


  1. (School of Finance,Hunan Business College,Changsha 410205,China)
  • Online:2009-05-25 Published:2012-04-23

Abstract: Empirical study shows that investors prefer home stock.There are both institutional factors and behavioral factors which
cause the undiversified inverstment.Traditional finance theory suggests that capital controll,risk hedging,information asymmetry and trade costs,etc may arouse the home bias.But the behavioral finance theory shows that familiarity,language and culture,proximateness,relatively optimistic,etc,can explain the home bias.

Key words: home bias, information asymmetry, trade costs, familiarity, relatively optimistic

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