Trust and Local Bias

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

19 Scopus Citations
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Detail(s)

Original languageEnglish
Pages (from-to)2211-2245
Journal / PublicationJournal of Financial and Quantitative Analysis
Volume55
Issue number7
Online published29 Oct 2019
Publication statusPublished - Nov 2020

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DOI

DOI
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Link to Scopus https://www.scopus.com/record/display.uri?eid=2-s2.0-85083375751&origin=recordpage
Permanent Link https://scholars.cityu.edu.hk/en/publications/publication(11b31ec6-a555-4873-bbee-3df3ca09bb8c).html

Abstract

In this article, we examine 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.

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Publication fingerprints text

100
Local Bias Keyphrases
100
Trust Bias Keyphrases
100
Market Concentratio... Economics, Econometrics a...
100
economics INIS
100
usa INIS
100
diversification INIS
66
Trust Region Keyphrases
33
United States Keyphrases
33
Local Economy Keyphrases
33
Institutional Inves... Keyphrases
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Citation Format(s)

[ RIS ] [ BibTeX ]
Trust and Local Bias. / Wei, Chishen; Zhang, Lei.
In: Journal of Financial and Quantitative Analysis, Vol. 55, No. 7, 11.2020, p. 2211-2245.

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review