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CULTURAL DISTANCE, RELIGION, AND FOREIGN BIAS IN PORTFOLIO INVESTMENT

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Title:CULTURAL DISTANCE, RELIGION, AND FOREIGN BIAS IN PORTFOLIO INVESTMENT
Authors:Rogers, Farrokh Trevor
Contributors:Huang, Wei (advisor)
Business Administration (department)
Keywords:Finance
cultural distance
economic development
Foreign bias
gambling preferences
show 2 moreportfolio investment
religion
show less
Date Issued:Dec 2018
Publisher:University of Hawaiʻi at Mānoa
Abstract:The effects of cultural distance and religion on foreign bias in portfolio investment are explored in two chapters. In the first part of this paper, evidence of a previously discovered curvilinear relationship between national culture and national wealth (GDP/capita) and is observed for the first time with aggregate investment data. This research finds GDP/capita to be curvilinear with the cultural distance index, and that this curve changes directions depending on the economic development of nations, the implication of which is that the curvilinear relationship between national culture and national wealth appears much more strikingly for developing markets and should be accounted for in investments research that includes such nations by including additional controls for economic development. In the second part of this paper, theory from culture is used to associate the effects of religion on portfolio allocations. Greater religiosity, or the ratio of the number of religious adherents to the total population, is found to be negatively associated with portfolio allocations for U.S. investment funds. This result follows previous theory and empirical results regarding the risk preferences of religious adherents. In addition, greater gambling preferences, as measured by the ratio of Catholics to Protestants, is associated with higher foreign portfolio allocations for funds. The results for both chapters are obtained with ten years of foreign allocations in 36 different countries from 475 U.S. investment funds.
Description:Ph.D. Thesis. University of Hawaiʻi at Mānoa 2018.
Pages/Duration:66 pages
URI:http://hdl.handle.net/10125/62233
Rights:All UHM dissertations and theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission from the copyright owner.
Appears in Collections: Ph.D. - Business Administration


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