Australia's equity home bias

    Research output: Contribution to journalArticlepeer-review

    15 Citations (Scopus)

    Abstract

    This paper constructs the float adjusted measure of home bias and explores the determinants of Australia's equity home bias by employing the International Monetary Fund's high quality dataset (2001 to 2005) on cross border equity investment. On the empirical front, the paper conducts robustness tests by employing instrumental variables that are standard in the financial economics literature. The paper finds that the share of the number of firms listed in the domestic market and the share of internet users in the total population of the host country has a significant impact on equity home bias. Trade linkages are found to have a mixed impact on equity home bias. The paper also finds that the country's market share of the world market capitalisation and transaction costs do not impact Australia's equity home bias. Investors are found to exhibit low diversification motives.
    Original languageEnglish
    Pages (from-to)53-73
    Number of pages21
    JournalAustralian Economic Papers
    Volume47
    Issue number1
    DOIs
    Publication statusPublished - 2008

    Fingerprint

    Dive into the research topics of 'Australia's equity home bias'. Together they form a unique fingerprint.

    Cite this