An information based explanation of the domestic bias in international equity investment

Article Abstract:

The domestic investment bias in international equity markets is explored using a simple noisy rational expectations model. The observed concentration of investors in their own national markets cannot be wholly explained by capital controls or foreign exchange risk. The likelihood of investors being better informed and having a better understanding of companies in the domestic market is noted. Not only is better information available about the earning prospects of domestic firms, the investor also does not need to cope with sometimes difficult problems of interpretation of the effects of legal conventions and business culture of another country when making domestic investments. Risk perception is also influenced by the asymmetric information situation. An empirical assessment is made, based on data from German and Swiss central banks.

Models, Foreign investments, International aspects, Capital market, Capital markets

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The role of credit market imperfections in the monetary transmission mechanism: arguments and evidence

Article Abstract:

The response to tight money monetary conditions is analyzed for various forms of credit and different sorts of borrowers. The effects of tight money and recession are seen to fall more severely on small companies rather than large firms. The size of the borrower is seen to have greater impact than the type of credit (bank or nonbank). Two theoretical bases are examined: one that focuses on direct effects of monetary policy, and the other that places emphasis on a financial propagation mechanism. The latter is more supported by the analysis presented.

Economic aspects, Monetary policy, Credit market, Credit markets

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Bibliography of Gary Becker's publications, 1952-1992

Article Abstract:

Article is a list of publications by Nobel Laureate in Economics, Gary Becker. Covering the period 1952-1992, the bibliography lists both monographs and selected articles.

Economics, Economists, Bibliography, Becker, Gary S.

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