The Determinants of Equity Home Bias in Turkey
Journal Title: Muhasebe ve Finansman Dergisi - Year 2016, Vol 18, Issue 72
Abstract
The aim of this research is to analyze the determinants of the equity home bias for Turkish investors. In this context, the roles of exchange rate risk, direct costs, familiarity, cultural factors, corporate governance, stock market characteristics and economic features as factors causing homes bias were examined for 20 target countries invested in between 2001 and 2010. Panel Regression Analysis is employed to examine the impact of seven factors proxies by 15 variables on the dependent variable, equity home bias, calculated using International Capital Asset Pricing Model as a benchmark. Analysis results suggest that main determinants of Turkish investors’ home bias in international equity investments are familiarity and cultural factors. Turkish investors prefer to allocate their stock investment in countries that are familiar and culturally close even if these markets are deprived of the possibility of diversification, geographically distant and frontier markets with weak corporate governance. These findings reveal that Turkish investors tend to be affected by behavioral factors rather than institutional factors in international equity investments.
Authors and Affiliations
Arzu ŞAHİN, Hatice DOĞUKANLI, Seda ŞENGÜL
Keywords
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- EP ID EP283502
- DOI 10.25095/mufad.396730
- Views 85
- Downloads 0
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