Trust and local bias

• Main Authors: WEI, Chi Shen, ZHANG, Lei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Trust; Local Bias; Institutional Investors; Cultural Economics; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: 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
• Institution: Singapore Management University

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...