ABSTRACT
Although a subsample analysis has the potential to provide an initial test of the hypotheses concerning the channels through which openness to experience affects foreign bias, it is likely that focusing solely on the level of economic development might be too crude a procedure to provide a robust test of the hypotheses. Moreover, we must note two caveats concerning the analysis of the allocation patterns of investors from developing countries. Firstly, as Fidora, Fratzscher, and Thimann (2007) note, it is possible that the holdings data of developing countries are not as accurate as those for developed countries.4 Secondly, the quality of the estimates of mean personality trait scores of individuals from non-Western cultures is lower.5 To circumvent the weaknesses of the subsample analysis, it is necessary to provide a more direct investigation of the effect of openness to experience while making investments in countries with a poor information environment and those that seem less familiar to investors. In order to do so, we complement our analysis by interacting openness to experience with finer information environment proxies, and variables marking the extent to which the country receiving the investment differs from the country that the investor comes from.
