IDEAS home Printed from
   My bibliography  Save this article

An Optimal World Portfolio on the Eve of World War I: Was There a Bias to Investing in the New World Rather Than in Europe?


  • Edlinger, Cécile
  • Merli, Maxime
  • Parent, Antoine


The geographical distributions of French and British foreign investment portfolios differ markedly before World War I. Did French portfolios favor European investments just as British portfolios favored “New World” assets? Should economic rationality have encouraged investors to invest widely in the “New World” rather than in Europe? Combining Modern Portfolio Theory and a new data set comprising assets listed on the Paris and London Stock Exchanges, we show that investing in the “New World” did not yield higher returns than investing in Europe. The “European preference” of the Paris Bourse and, by extension, of French investors was not inefficient.

Suggested Citation

  • Edlinger, Cécile & Merli, Maxime & Parent, Antoine, 2013. "An Optimal World Portfolio on the Eve of World War I: Was There a Bias to Investing in the New World Rather Than in Europe?," The Journal of Economic History, Cambridge University Press, vol. 73(02), pages 498-530, June.
  • Handle: RePEc:cup:jechis:v:73:y:2013:i:02:p:498-530_00

    Download full text from publisher

    File URL:
    File Function: link to article abstract page
    Download Restriction: no

    Other versions of this item:


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Eduardo van Hombeeck, Carlos, 2017. "An exorbitant privilege in the first age of international financial integration," Bank of England working papers 668, Bank of England.
    2. Acheson, Graeme G. & Campbell, Gareth & Turner, John D., 2015. "Who financed the expansion of the equity market? Shareholder clienteles in Victorian Britain," QUCEH Working Paper Series 15-07, Queen's University Belfast, Queen's University Centre for Economic History.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jechis:v:73:y:2013:i:02:p:498-530_00. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.