Publication Type
Journal Article
Version
acceptedVersion
Publication Date
7-2015
Abstract
We develop a 10K-based measure of spatial variation in the availability of value-relevant information that reflects the multi-dimensional nature of firm location. Spatially distributed information generates location-based information asymmetries that affect institutional portfolio decisions and performance. Institutions overweigh firms with greater local economic exposure and earn superior returns on corresponding trades, even for firms not headquartered locally. These patterns are stronger among harder-to-value stocks. Consistent with local informational advantage, local investor performance increases with the local exposure of individual stock holdings and her portfolio as a whole, and more so when her portfolio is more heavily tilted toward local stocks.
Keywords
Multi-Dimensional Firm Location, Information Asymmetry, Local Informational Advantage
Discipline
Corporate Finance | Finance and Financial Management
Research Areas
Finance
Publication
Review of Financial Studies
Volume
28
Issue
7
First Page
2009
Last Page
2049
ISSN
0893-9454
Identifier
10.1093/rfs/hhv004
Publisher
Oxford University Press
Citation
BERNILE, Gennaro; KUMAR, Alok; and SULAEMAN, Johan.
Home away from home: Geography of information and local investors. (2015). Review of Financial Studies. 28, (7), 2009-2049.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3777
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1093/rfs/hhv004