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(Country) Home bias in Italian occupational pension funds asset allocation choices

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  • Lippi, Andrea

Abstract

This paper expands the current literature on home bias and in country home bias especially, in five ways: (a) it analyzes an unexamined market, that of Italian occupational pension funds; (b) it considers three asset classes: government securities, corporate bonds and equities; (c) it examines the choices made by professional managers; (d) it checks whether the presence of Italian home bias is influenced by the benchmark or not and (e) it examines whether Italian home bias influences Italian asset managers and if it is also identifiable in the case of coacting management in the presence of one or more Italian asset managers. The results obtained demonstrate that home bias is a phenomenon that can be argued to exist in Italian occupational pension fund asset manager's asset allocation. The results of this research tend to show that when the asset manager is Italian, single or coacting, the choice falls on Italian asset classes. Finally, the home bias phenomenon could be considered an element for containing volatility in the prices of government securities, corporate bonds and equities because of the constant demand created on the market by the asset managers affected by this bias.

Suggested Citation

  • Lippi, Andrea, 2016. "(Country) Home bias in Italian occupational pension funds asset allocation choices," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 78-82.
    • Handle: RePEc:eee:quaeco:v:59:y:2016:i:c:p:78-82
    DOI: 10.1016/j.qref.2015.07.001
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    Cited by:

    1. Dreassi, Alberto & Miani, Stefano & Paltrinieri, Andrea, 2017. "Sovereign pension and social security reserve funds: A portfolio analysis," Global Finance Journal, Elsevier, vol. 34(C), pages 43-53.
    2. Eduard Gaar & David Scherer & Dirk Schiereck, 2022. "The home bias and the local bias: A survey," Management Review Quarterly, Springer, vol. 72(1), pages 21-57, February.

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    More about this item

    Keywords

    Home bias; Country home bias; Decision making; Asset allocation choice; Occupational pension funds;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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