Our speaker will be Clemens Wagner (WU, VGSF).

He will give a talk on “Local Returns and Beliefs about the Stock Market” (joint with Tobin Hanspal).

Abstract: This study documents how investors extrapolate from recent stock returns of locally headquartered firms when forming beliefs about aggregate stock market outcomes. Consistent with studies on the equity home bias, we find that the responsiveness to local information is a function of proximity. While investors may feel more comfortable interpreting local information, we find no evidence that these effects are sensitive to the informativeness of local returns for the aggregate outcome. Our findings suggest that differences in beliefs about the information contained in public signals vary systematically with geographical distance, which has been suggested as an important driver of the local bias in equity markets.

The talk will take place on Novmeber 30, 2022 hybrid at 2 pm in room TC.5.04.

A direct link to the stream will be posted on our website.