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- Title
Industry Clusters and the Geography of Portfolio Choice.
- Authors
Addoum, Jawad M.; Delikouras, Stefanos; Ke, Da; Korniotis, George M.
- Abstract
Using detailed data on U.S. households' locations, employment, and financial portfolios, we document that individuals employed in locally clustered industries are more likely to invest in risky assets. This pattern is strongest among individuals with high labor income, employed in skilled occupations, and with strong cognitive skills. Our overall evidence suggests the relation between industry clusters and investment decisions is best explained by clusters enhancing human capital among local industry workers, in turn amplifying their effective risk tolerance. Our findings highlight the important role of local labor market composition in generating household portfolio patterns within and across geographies.
- Subjects
HOUSEHOLDS; INDUSTRIAL clusters; GEOGRAPHY; INVESTMENT risk; INCOME; LABOR market
- Publication
Journal of Financial & Quantitative Analysis, 2024, Vol 59, Issue 3, p1031
- ISSN
0022-1090
- Publication type
Article
- DOI
10.1017/S0022109023000236