Author

Contributions

  • Warnock, Francis E. - Contributor
  • National Bureau of Economic Research. - Contributor

Publication

2006 - National Bureau of Economic Research, Cambridge, Mass, Massachusetts

Language

English

Word Count

6,750 words, Guess

Page Count

27 pages

Identifiers

Description

"We analyze foreigners and domestic institutional investors holdings of U.S. equities and find common preferences for large firms and firms that are diversified internationally. The domestic preference for internationally diversified firms implies that investors might obtain substantial international diversification by investing at home. Using an international factor model, we show that exposure to foreign equity markets is indeed greater for domestic firms that are more diversified internationally, suggesting that at least some of the home-grown foreign exposure translates into international diversification benefits. After accounting for home-grown foreign exposure, the share of foreign equities in U.S. portfolios doubles to 24 percent, greatly reducing the observed home bias"--Federal Reserve Board web site.

Subjects

Series Statement

  • NBER working paper series -- no. 12220.
  • Working paper series (National Bureau of Economic Research) -- working paper no. 12220.

Links

Other Editions

  • International diversification at home and abroadNational Bureau of Economic Research2006

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