Home Bias at Selecting Financial Advisors in Cross-Border M&As

This paper constructs the float adjusted measure of home bias and explores the determinants of bond home bias by employing the International Monetary Fund's high quality dataset (2001 to 2009) on cross-border bond investment. The paper finds that Australian investors' prefer investing in countries with higher economic development and more developed bond markets. Exchange rate volatility appears to be an impediment for cross-border bond investment. Investors prefer investing in countries with stronger quality of institutions including bureaucratic quality, government effectiveness, regulatory quality, rule of law, efficiency of judicial system, risk of contract repudiation, and rating of accounting standards.

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The certification role of financial advisors in cross-border M&As

International Review of Financial Analysis ◽

10.1016/j.irfa.2014.01.003 ◽

2014 ◽

Vol 32 ◽

pp. 143-158 ◽

Cited By ~ 4

Author(s):

Bill B. Francis ◽

Iftekhar Hasan ◽

Xian Sun

Keyword(s):

Financial Advisors ◽

Cross Border

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Capital Market Integration in Euroland: The Role of Banks

German Economic Review ◽

10.1111/1468-0475.00021 ◽

2000 ◽

Vol 1 (4) ◽

pp. 443-464 ◽

Cited By ~ 5

Author(s):

Claudia M. Buch

Keyword(s):

Financial Market ◽

Risk Taking ◽

Capital Market ◽

Market Integration ◽

Home Bias ◽

Capital Market Integration ◽

Clear Cut ◽

Cross Border ◽

Financial Market Integration

Abstract The introduction of the euro marks a milestone in the process of European financial market integration. This paper analyzes the implications of the euro for cross-border banking activities. A portfolio model is used which captures the role of banks as providers of informational and of risk-diversification services. By eliminating exchange rate risks, the euro enhances the incentives of banks to expand within Euroland. Yet, while the currency bias in bank portfolios will be eliminated, the home bias will remain. Implications of market integration for the risk-taking and the monitoring of banks are not clear-cut.

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