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To what extent does human capital increase the home country bias?

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  • Boonstra, Bernard
  • Sterken, Elmer

    (Groningen University)

Abstract

This paper analyses the role of human capital as a hedge against future unexpected changes in consumption of nontradable goods. We show, in line with Baxter-Jermann (1997) that human capital aggra- vates the home country bias, although we a lower increase of the bias based on an empirical analysis for the U.S. economy.

Suggested Citation

  • Boonstra, Bernard & Sterken, Elmer, 2001. "To what extent does human capital increase the home country bias?," Research Report 01E03, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    • Handle: RePEc:gro:rugsom:01e03
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    File URL: http://irs.ub.rug.nl/ppn/216861675
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    References listed on IDEAS

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    1. Lewis, Karen K., 1995. "Puzzles in international financial markets," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 37, pages 1913-1971, Elsevier.
    2. Karen K. Lewis, 1999. "Trying to Explain Home Bias in Equities and Consumption," Journal of Economic Literature, American Economic Association, vol. 37(2), pages 571-608, June.
    3. French, Kenneth R & Poterba, James M, 1991. "Investor Diversification and International Equity Markets," American Economic Review, American Economic Association, vol. 81(2), pages 222-226, May.
    4. Tesar, Linda L. & Werner, Ingrid M., 1995. "Home bias and high turnover," Journal of International Money and Finance, Elsevier, vol. 14(4), pages 467-492, August.
    5. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412, National Bureau of Economic Research, Inc.
    6. Baxter, Marianne & Jermann, Urban J, 1997. "The International Diversification Puzzle Is Worse Than You Think," American Economic Review, American Economic Association, vol. 87(1), pages 170-180, March.
    7. repec:bla:scandj:v:95:y:1993:i:1:p:97-109 is not listed on IDEAS
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