This paper examines determinants of domestic (investors overweight their domestic market) and foreign bias (investors over- or underweight foreign markets) in international asset allocation from 26 developed and developing countries. In particular, we document robust evidence that...

We show that internationally diversified portfolios carry sizeable political risk premia. We use a tail-risk portfolio selection model to obtain political efficient frontiers from skewed return distributions and manage political risk, and design an inference test to draw conclusions. We find...

We investigate whether international operations enhance information links between firms and foreign investors. Exploiting novel subsidiary-level data and within-firm-location variations, we show that, after a firm expands into a new market, it attracts a larger increase in portfolio allocation...

Efficient financial globalization should reward high-skilled financial institutions and punish low-skilled institutions. We show that the globalization of the mutual fund industry in the beginning of the century has exhibited the opposite pattern: low-skilled companies can benefit from...

We construct a direct measure of U.S. based foreign sentiment using flow shifts between U.S. and international mutual funds. Foreign sentiment predicts return reversals in international markets, while local sentiments predict reversals in local markets. Exploring this segmentation, we find that...