Trust and local bias
This paper examines the effect of social trust on local bias. Our evidence suggests that institutional investors located in high-trust regions of the United States exhibit lower local bias. Moreover, we find that high-trust investors are better diversified, suggesting that trust helps accomplish gre...
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Institutional Knowledge at Singapore Management University
2019
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sg-smu-ink.lkcsb_research-75282020-06-02T08:38:29Z Trust and local bias WEI, Chi Shen ZHANG, Lei This paper examines the effect of social trust on local bias. Our evidence suggests that institutional investors located in high-trust regions of the United States exhibit lower local bias. Moreover, we find that high-trust investors are better diversified, suggesting that trust helps accomplish greater diversification. The results are not due to firm, demographic, or local economic characteristics. Additional analysis reveals that the documented informational advantage in local holdings exists only in low-trust regions. We show that this finding is consistent with a trust explanation. 2019-10-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6529 info:doi/10.1017/S0022109019000942 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7528/viewcontent/Trust_bias_sv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Trust Local Bias Institutional Investors Cultural Economics Finance and Financial Management Portfolio and Security Analysis |
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Trust Local Bias Institutional Investors Cultural Economics Finance and Financial Management Portfolio and Security Analysis |
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Trust Local Bias Institutional Investors Cultural Economics Finance and Financial Management Portfolio and Security Analysis WEI, Chi Shen ZHANG, Lei Trust and local bias |
| description |
This paper examines the effect of social trust on local bias. Our evidence suggests that institutional investors located in high-trust regions of the United States exhibit lower local bias. Moreover, we find that high-trust investors are better diversified, suggesting that trust helps accomplish greater diversification. The results are not due to firm, demographic, or local economic characteristics. Additional analysis reveals that the documented informational advantage in local holdings exists only in low-trust regions. We show that this finding is consistent with a trust explanation. |
| format |
text |
| author |
WEI, Chi Shen ZHANG, Lei |
| author_facet |
WEI, Chi Shen ZHANG, Lei |
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WEI, Chi Shen |
| title |
Trust and local bias |
| title_short |
Trust and local bias |
| title_full |
Trust and local bias |
| title_fullStr |
Trust and local bias |
| title_full_unstemmed |
Trust and local bias |
| title_sort |
trust and local bias |
| publisher |
Institutional Knowledge at Singapore Management University |
| publishDate |
2019 |
| url |
https://ink.library.smu.edu.sg/lkcsb_research/6529 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7528/viewcontent/Trust_bias_sv.pdf |
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