One possible explanation for home bias is that investors may obtain indirect international diversification benefits by … tests to examine the diversification potential of multinational firms and foreign market indices for investors domiciled in … multinational stocks. However, there is weak evidence that U.S. multinationals provided global diversification benefits in the full …

unexploited gains from further international diversification. Mutual funds investing globally could achieve better risk …

reduces effective diversification. However, a multi-country DSGE model of portfolio choice makes clear that the effects of a … puzzle, and finds that international investors do seek the diversification benefits of low cross-country correlations as …

would optimally diversify away domestic output risk. Therefore, in a world without investor home bias, consumption growth … country appears to be highly correlated with its own output growth relative to the world. This phenomenon may be called …

equilibrium. We construct an estimate of the world portfolio of shares available to investors who are not controlling shareholders …. This available world portfolio differs sharply from the world market portfolio. In regressions explaining the portfolio … weights of U.S. investors, the world portfolio of available shares has a positive significant coefficient but the world market …

optimal international diversification. We find that in the symmetric case the model's ability to help explain home …