Multinationals And The Gains From International Diversification
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Multinationals And The Gains From International Diversification
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Author : Patrick F. Rowland
language : en
Publisher:
Release Date : 1998
Multinationals And The Gains From International Diversification written by Patrick F. Rowland and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998 with Diversification in industry categories.
One possible explanation for home bias is that investors may obtain indirect international diversification benefits by investing in multinational firms rather than by investing directly in foreign markets. This paper employs mean-variance spanning tests to examine the diversification potential of multinational firms and foreign market indices for investors domiciled in Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. We find that in most countries and most time periods, the portfolio of domestic stocks spans the risk and return opportunities of a portfolio that includes domestic and multinational stocks. However, there is weak evidence that U.S. multinationals provided global diversification benefits in the full 1984-92 sample and in the post-1987 subsample. We also find that the addition of foreign market indices to a domestic portfolio - inclusive of multinationals - provides diversification benefits. The economic importance of the shift of the portfolio frontier - measured as the utility gain from diversification - varies considerably from market to market and often reflects the benefits of large short positions in certain markets.
Multinationals And The Gains From International Diversification
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Author : Patrick F. Rowland
language : en
Publisher:
Release Date : 2002
Multinationals And The Gains From International Diversification written by Patrick F. Rowland and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with categories.
One possible explanation for home bias is that investors may obtain indirect international diversification benefits by investing in multinational firms rather than by investing directly in foreign markets. This paper employs mean-variance spanning tests to examine the diversification potential of multinational firms and foreign market indices for investors domiciled in Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. We find that in most countries and most time periods, the portfolio of domestic stocks spans the risk and return opportunities of a portfolio that includes domestic and multinational stocks. However, there is weak evidence that U.S. multinationals provided global diversification benefits in the full 1984-92 sample and in the post-1987 subsample. We also find that the addition of foreign market indices to a domestic portfolio - inclusive of multinationals - provides diversification benefits. The economic importance of the shift of the portfolio frontier - measured as the utility gain from diversification - varies considerably from market to market and often reflects the benefits of large short positions in certain markets.
International Diversification And The Multinational Enterprise
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Author : Alan M. Rugman
language : en
Publisher: Lexington, Mass. ; Toronto : Heath
Release Date : 1979
International Diversification And The Multinational Enterprise written by Alan M. Rugman and has been published by Lexington, Mass. ; Toronto : Heath this book supported file pdf, txt, epub, kindle and other format this book has been release on 1979 with Business & Economics categories.
Investor Benefits From International Diversification
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Author : Mikael Gustafsson
language : en
Publisher:
Release Date : 1985
Investor Benefits From International Diversification written by Mikael Gustafsson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with categories.
The Gains From International Diversification Revisited
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Author : Patrick F. Rowland
language : en
Publisher:
Release Date : 1997
The Gains From International Diversification Revisited written by Patrick F. Rowland and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with categories.
Inside The Multinationals
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Author : Alan M. Rugman
language : en
Publisher: Taylor & Francis
Release Date : 1981
Inside The Multinationals written by Alan M. Rugman and has been published by Taylor & Francis this book supported file pdf, txt, epub, kindle and other format this book has been release on 1981 with Entreprises multinationales categories.
Brookings Wharton Papers On Financial Services 1998
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Author : Robert E. Litan
language : en
Publisher: Jessica Kingsley Publishers
Release Date : 1998-07
Brookings Wharton Papers On Financial Services 1998 written by Robert E. Litan and has been published by Jessica Kingsley Publishers this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998-07 with Business & Economics categories.
Comprises nine papers on the 1987 stock market crash which discuss causes and its implications for today.
International Diversification At Home And Abroad
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Author : Fang Cai
language : en
Publisher:
Release Date : 2007
International Diversification At Home And Abroad written by Fang Cai and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
It is an established fact that investors favor the familiar%u2014be it domestic securities or, within a country, the securities of nearby firms%u2014and avoid investments that would provide the greatest diversification benefits. While we do not rule out familiarity as an important driver of portfolio allocations, we provide new evidence of investors%u2019 international diversification motive. In particular, our analysis of the security-level U.S. equity holdings of foreign and domestic institutional investors indicates that institutional investors reveal a preference for domestic multinationals (MNCs), even after controlling for familiarity factors. We attribute this revealed preference to the desire to obtain %u201Csafe%u201D international diversification. We then show that holdings of domestic MNCs are substantial and, after accounting for this home-grown foreign exposure, that the share of %u201Cforeign%u201D equities in investors%u2019 portfolios roughly doubles, reducing (but not eliminating) the observed home bias.
State Multinationals
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Author : Xiaoming He
language : en
Publisher:
Release Date : 2011
State Multinationals written by Xiaoming He and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
State multinationals were investigated in the 1980s. Since then, little work on the state multinational has been done because of the dramatic changes in the world in terms of both politics and economics, such as the waves of liberalization, deregulation and privatization. However, in the current global environment, we see the increase in the number of state multinationals, and thus initiate research of this study. This study investigates two sets of research questions. First, is the state multinational the overlap of two organizational forms (the state owned enterprise (SOE) and the multinational enterprise (MNE))? If so, what are the key characteristics and implications of the state multinational? Second, can the state multinational be considered a hybrid organizational form, which is different from that of its parents? Propositions are set forth to examine the first set of research questions. After clarifying the unit of analysis for this study, the second set of questions asks how state ownership influences the state multinational's international diversification and firm performance, and what is the impact of institutional ownership on the state ownership--international diversification relationship, and how home country institutional environments influence the proposed relationships. Hypotheses are proposed to investigate the second set of research questions and are tested with a three-year sample (2004-2007) and a seven year sample (2000-2007) of the state multinational. Results of hierarchical linear models indicate that the state multinational, first, does have characteristics that are different from its parents (i.e., the SOE and the MNE) and thus is considered a hybrid organizational form. Second, state ownership may improve the level of the state multinational's international diversification, but reaches a threshold, after which the positive influence diminishes due to the prominent agency costs. Third, institutional ownership has been verified as a useful mechanism to improve the effectiveness of corporate governance in the case of the state multinational. Fourth, home country institutional environments matter in the studied relationships. The state multinational in developed countries with an established institutional environment may not depend on state ownership as much as those in developing and emerging countries. Results also show the influence of state ownership on the state multinational's firm performance. The state ownership--performance relationship is also non-linear (inverted U-shaped). Moreover, in the case of the state multinational, the higher the level of international diversification, the higher the firm performance. In addition, international strategies of the state multinational function as a mediator for the relationship between state ownership and firm performance.
The Benefits Of International Diversification
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Author : Lorne N. Switzer
language : en
Publisher:
Release Date : 2015
The Benefits Of International Diversification written by Lorne N. Switzer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This paper examines the benefits of international diversification for US investors, while accounting for market development, corporate governance, market cap effects, and structural change across countries over period August 1996-July 2013. Improved risk adjusted returns are obtained from a diversified portfolio consisting of a mix of developed and emerging countries. Additionally, we find that diversification benefits are not significant for most of the small-cap foreign assets when an investor already holds position in corresponding countries large-cap assets. Diversification benefits based on the governance effectiveness of a country's companies are not ubiquitous. We find that economically significant improvements in risk-return performance can be attained by adding large caps of developed countries with high and low overall Governance Metrics International (GMI) ratings and large and small caps of emerging countries with low overall GMI ratings to the investment universe containing the assets of common law developed countries. However, diversification benefits are economically significant only for large and small caps of low GMI emerging countries when short selling is not allowed.