The marginal benefits of diversification exceed the costs by a decreasing margin, and diversifying beyond the optimal level will produce a wealth loss. This trade-off predicts an inverted U-relation between the degree of diversification and wealth. We find empirical evidence in support of this...

We examine whether foreign equity holdings of portfolio investors depend on the level of information accessibility between the investors' home and host countries. Using a comprehensive data set, alternative measures of information accessibility and robust analytical techniques, we show that...

Economic reasoning suggests that financial globalization that encourages optimal international portfolio investments should improve investor protection standards (IPS) of a country. In practice, however, investors manifest varying degrees of suboptimal international portfolio allocations. Using...