Jonas Hjort

amse seminar
development and international economics seminar

Jonas Hjort

Columbia Business School
Ethnic investing and the value of firms

IBD Amphi

Îlot Bernard du Bois - Amphithéâtre

5-9 boulevard Maurice Bourdet
13001 Marseille

Lundi 14 mai 2018| 14:30 - 16:00

Timothée Demont : timothee.demont[at]
Roberta Ziparo : rziparo[at]


We study ethnic investing, using transaction level data from Kenya's stock exchange (NSE) and CEO/board turnover. A given investor invests more in a given firm when the firm is run by coethnics, and earns lower returns on such investments. However, rather than pay to satisfy a taste for coethnicity, investors react differently to news about coethnic firms---buying more in response, and earning especially low returns on news-triggered coethnic investments. We show that this form of ethnic investing lowers the average value of firms on the NSE and misallocates value across firms as investors forego high(er) returns in ethnic minority run firms.

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