Australia’s Equity Home Bias and Corporate Governance
نویسنده
چکیده
This paper constructs the float adjusted measure of home bias and explores the determinants of Australia’s equity home bias by employing International Monetary Fund’s high quality dataset (2001 to 2005) on cross border equity investment. The paper finds that information asymmetries arising due to countries regulatory and legal environment have significant impact on Australia’s equity home bias. Trade linkages are found to have a significant impact on Australia’s equity home bias. Australian investors exhibit a preference for English speaking and common legal origin countries. Transaction costs, though statistically significant, have a very low value to suggest a minor impact on Australia’s home bias. This paper finds low diversification motives of Australian investors. JEL Classifications: G11, G15, G30
منابع مشابه
Corporate governance, regulation and foreign equity ownership: Lessons from Korea
a r t i c l e i n f o Keywords: Corporate governance in emerging markets Foreign equity ownership Regulatory reform South Korea We investigate whether the introduction of a mandated independent director system affected firm ownership structure in South Korea, where the governance system changed significantly after the 1997 financial crisis. Results indicate that foreign investors place consider...
متن کاملThe Role of Corporate Governance on Tax Justice (Horizontal Equity and Vertical Equity)
The purpose of this study is to examine the role of corporate governance in the concept of tax justice. The current research contributes to the field of applied research and is regarded as a descriptive survey research, testing four main hypotheses and eight special hypotheses. The required data for this research were obtained through a questionnaire distributed among financial managers of 133 ...
متن کاملCountry Portfolios with Imperfect Corporate Governance∗
Equity home bias is one of the most enduring puzzles in international finance. In this paper, I start out by documenting a novel stylized fact about home bias: countries with weaker domestic institutions hold fewer foreign assets. I then explore a macroeconomic mechanism by which the presence of agency problems in firms may explain this pattern. To do so, I develop a two-country dynamic stochas...
متن کاملDoes corporate governance make financial reports better, or just better for equity investors?
Financial reports should provide useful information to both shareholders and creditors, according to U.S. accounting principles. However, directors of corporations have fiduciary duties only toward equity holders, and those fiduciary duties normally do not extend to the interests of creditors. We examine whether this slant in corporate governance biases financial reports in favor of equity inve...
متن کاملThe Role of Private Equity and Activist Hedge Funds in Corporate Governance – Related Policy Issues
Following its earlier consideration of hedge funds and private equity, the Steering Group on Corporate Governance considered policy issues from the perspective of the Principles of Corporate Governance and agreed to release its findings.
متن کامل