Multinationals and the Gains from International Diversification
This paper employs mean-variance spanning tests to examine the diversification potential of multinational firms and foreign market indices from the perspective of investors in the G7 countries over the 1984-95 period. We find evidence that multinational corporations may have provided diversification benefits for investors in Germany and the United States. We find that the addition of foreign market indices to a domestic portfolio - inclusive of multinationals - provided substantial diversification benefits in all countries. The economic importance of the shift of the portfolio frontier varied considerably across markets. (Copyright: Elsevier)
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Volume (Year): 7 (2004)
Issue (Month): 4 (October)
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