The only game in town: stock-price consequences of local bias
"Theory suggests that, in the presence of local bias, the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region. We test this proposition using data on U.S. Census regions and states, and...
Gespeichert in:
| Hauptverfasser: | , , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2005
|
| Schriftenreihe: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
11488 |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | "Theory suggests that, in the presence of local bias, the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region. We test this proposition using data on U.S. Census regions and states, and find clear-cut support for it. Most of the variation in the ratio of interest comes from differences across regions in aggregate book value per capita. Regions with low population density--e.g., the Deep South--are home to relatively few firms per capita, which leads to higher stock prices via an "only-game-in-town" effect. This effect is especially pronounced for smaller, less visible firms, where the impact of location on stock prices is roughly 12 percent"--National Bureau of Economic Research web site. |
| Beschreibung: | 49 S. graph. Darst. |
Internformat
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| spelling | Hong, Harrison G. Verfasser (DE-588)12477170X aut The only game in town stock-price consequences of local bias Harrison Hong ; Jeffrey D. Kubik ; Jeremy C. Stein Cambridge, Mass. National Bureau of Economic Research 2005 49 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11488 "Theory suggests that, in the presence of local bias, the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region. We test this proposition using data on U.S. Census regions and states, and find clear-cut support for it. Most of the variation in the ratio of interest comes from differences across regions in aggregate book value per capita. Regions with low population density--e.g., the Deep South--are home to relatively few firms per capita, which leads to higher stock prices via an "only-game-in-town" effect. This effect is especially pronounced for smaller, less visible firms, where the impact of location on stock prices is roughly 12 percent"--National Bureau of Economic Research web site. Ökonometrisches Modell Economic geography Stocks Prices United States Econometric models USA Kubik, Jeffrey D. Verfasser (DE-588)124565972 aut Stein, Jeremy C. 1960- Verfasser (DE-588)124771726 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11488 (DE-604)BV002801238 11488 http://papers.nber.org/papers/w11488.pdf kostenfrei Volltext |
| spellingShingle | Hong, Harrison G. Kubik, Jeffrey D. Stein, Jeremy C. 1960- The only game in town stock-price consequences of local bias National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Ökonometrisches Modell Economic geography Stocks Prices United States Econometric models |
| title | The only game in town stock-price consequences of local bias |
| title_auth | The only game in town stock-price consequences of local bias |
| title_exact_search | The only game in town stock-price consequences of local bias |
| title_exact_search_txtP | The only game in town stock-price consequences of local bias |
| title_full | The only game in town stock-price consequences of local bias Harrison Hong ; Jeffrey D. Kubik ; Jeremy C. Stein |
| title_fullStr | The only game in town stock-price consequences of local bias Harrison Hong ; Jeffrey D. Kubik ; Jeremy C. Stein |
| title_full_unstemmed | The only game in town stock-price consequences of local bias Harrison Hong ; Jeffrey D. Kubik ; Jeremy C. Stein |
| title_short | The only game in town |
| title_sort | the only game in town stock price consequences of local bias |
| title_sub | stock-price consequences of local bias |
| topic | Ökonometrisches Modell Economic geography Stocks Prices United States Econometric models |
| topic_facet | Ökonometrisches Modell Economic geography Stocks Prices United States Econometric models USA |
| url | http://papers.nber.org/papers/w11488.pdf |
| volume_link | (DE-604)BV002801238 |
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