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dc.contributor.authorBaltzer, Markusen_US
dc.contributor.authorStolper, Oscaren_US
dc.contributor.authorWalter, Andreasen_US
dc.description.abstractWe analyze the effect of geographic proximity on individual investors' portfolio choice. Using a unique data set which covers the common stockholdings of private households at regional banks in Germany, we document strong and consistent overinvestment in geographically close companies. Our results conclusively reject the presence of an informational advantage ('home-field advantage') of local over non-local investors. Instead, households' preference for local equity turns out to be familiarity-driven. We conclude that individual investors' local bias is induced by ambiguity aversion in the portfolio selection process rather than a trading strategy based on superior information about local companies.en_US
dc.publisherDeutsche Bundesbank Frankfurt a. M.en_US
dc.relation.ispartofseriesDiscussion Paper Series 1: Economic Studies 2011,23en_US
dc.subject.keywordlocal biasen_US
dc.subject.keywordportfolio diversificationen_US
dc.subject.keywordhousehold financeen_US
dc.subject.keywordinvestor behaviouren_US
dc.subject.keywordambiguity aversionen_US
dc.titleHome-field advantage or a matter of ambiguity aversion? Local bias among German individual investorsen_US
dc.typeWorking Paperen_US
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

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