Using a panel fractional regression model to evaluate the determinants of shares of international investment positions, we find some strong empirical support to the claim that a diversification motive is relevant. It turns out that less synchronized economies attract larger portfolio investment...

We investigate income smoothing associated with international portfolio diversification by decomposing the net factor income (NFI) channel into interests, dividends and retained earnings, for OECD and EU countries. We find that interest receipts and equity dividend payments contribute...