Home away from home: : Geography of information and local investors
- Autores: Gennaro Bernile, Alok Kumar, Johan Sulaeman
- Localización: Review of Financial Studies, ISSN-e 1465-7368, Vol. 28, Nº. 7, 2015, págs. 2009-2049
- Idioma: inglés
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- Dialnet Métricas: 1 Cita
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Resumen
We develop a 10-K-based multidimensional measure of firm locations. Using this measure, we show that firm-level information is geographically distributed and institutional investors are able to exploit the resulting information asymmetry. Specifically, institutional investors overweigh firms whose 10-K frequently mentions the investors' state even when those firms are not headquartered locally and earn superior returns on those stocks. These ownership and performance patterns are stronger among hard-to-value firms. Local investor performance increases with the degree of local bias and with the local economic exposure of portfolio firms. Overall, geographical variation in firm-level information generates economically significant location-based information asymmetry
