Goods Trade and International Equity Portfolios

Fabrice Collard, Harris Dellas, Behzad Diba, Alan Stockman

We show that international trade in goods is the main determinant of international equity portfolios and offers a compelling -- theoretically and empirically -- resolution of the portfolio home bias puzzle. The model implies that investors can achieve full international risk diversification if the share of wealth invested in foreign equity matches their country's degree of openness (the imports to GDP share). The empirical evidence strongly supports this implication

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Year of publication:	November 2007
Authors:	Collard, Fabrice
Other Persons:	Stockman, Alan (contributor) ; Diba, Behzad (contributor) ; Dellas, Harris (contributor)
Institutions:	National Bureau of Economic Research (contributor)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Internationale Wirtschaft \| International economy \| Portfolio-Investition \| Foreign portfolio investment \| Portfoliodiversifikation \| Portfolio diversification \| Güter \| Goods \| Industrieländer \| Industrialized countries \| Offene Volkswirtschaft \| Open economy \| Außenhandel \| Foreign trade

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Extent:	1 Online-Ressource
Series:	NBER working paper series ; no. w13612
Type of publication:	Book / Working Paper
Language:	English
Notes:	Mode of access: World Wide Web System requirements: Adobe [Acrobat] Reader required for PDF files Hardcopy version available to institutional subscribers.
Other identifiers:	10.3386/w13612 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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