TY  - UNPD
A1  - Christelis, Dimitris
A1  - Georgarakos, Dimitris
T1  - Investing at home and abroad: different costs, different people?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2009,28
N2  - We investigate US households’ direct investment in stocks, bonds and liquid accounts and their foreign counterparts, in order to identify the different participation hurdles affecting asset investment domestically and overseas. To this end, we estimate a trivariate probit model with three further selection equations that allows correlations among unobservables of all possible asset choices. Our results point to the existence of a second hurdle that stock owners need to overcome in order to invest in foreign stocks. Among stockholders, we show that economic resources, willingness to assume greater financial risks, shopping around for the best investment opportunities all increase the probability to invest in foreign stocks. Furthermore, we find that households who seek financial advice from relatives, friends and work contacts are less likely to invest in foreign stocks. This result corroborates the conjecture by Hong et al. (2004) that social interactions should discourage investment in foreign stocks, given their limited popularity. On the other hand, we find little evidence for additional pecuniary or informational costs associated with investment in foreign bonds and liquid accounts. Finally, we show that ignoring correlations of unobservables across different asset choices can lead to very misleading results.
T3  - CFS working paper series - 2009, 28 
KW  - Foreign Assets
KW  - Household Finance
KW  - Stockholding
KW  - Multivariate Probit
KW  - Simulated Maximum Likelihood
KW  - Selection
KW  - USA
KW  - Haushalt
KW  - Direktinvestition
Y1  - 2009
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/7386
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-73586
ER  -