73rd International Atlantic Economic Conference

March 28 - 31, 2012 | Istanbul, Turkey

Geografical positions of companies and stock returns correlation: Evidence from WSE

Friday, 30 March 2012: 8:50 AM
Jerzy Gajdka, Prof. , Department of Capital Market, University of Lodz (Poland), Lodz, Poland
According to one of  behavioral finance  theorems  there exists an inwestor bias in favor of geografically close companies. One of implications of this bias is that  the correlation of rate of returns of pairs of companies  decreses as the distance between companies increases.  In our paper  we  present the results of research concerning that problem conducted  with data from the Warsaw Stock Exchange.