The impact of gender equality on home bias in investment portfolios

Abstract

Purpose This study aims to investigate the impact of gender equality (GE) on home bias (HB) in investment decisions, using data from 67 countries spanning the period 2012 to 2019. Design/methodology/approach Data are extracted from multiple sources, including the Coordinated Portfolio Investment Survey (CPIS), the World Bank, and the World Economic Forum. The study employs a fixed effects model and further incorporates dynamic empirical methods as well as quantile regression to ensure robustness across different levels of home bias. Findings The results reveal a significant negative relationship between gender equality and home bias, suggesting that more gender-equal societies exhibit less home bias in their investment portfolios. Country-level Governance, capital controls, inflation, and economic indicators also play important roles. Practical implications This study demonstrates that more pronounced gender equality is associated with less pronounced home bias in portfolio investment, implying that policymakers and financial institutions might promote international diversification by increasing gender equality. Originality/value This paper examines the relationship between gender equality and home bias, addressing a critical gap in the literature on portfolio allocation decisions. Unlike prior research, which has primarily focused on factors such as governance, capital controls, and macroeconomic indicators, this study introduces a sociocultural dimension by exploring the role of gender equality, an aspect largely overlooked in existing studies.