@article{5821956a857f4c9584f21b2da49ddb20,
title = "Do foreign stocks substitute for international diversification?",
abstract = "Using a novel sample of foreign securities available for trade in 42 countries during the last four decades (1979–2018), we examine the rise in importance of foreign stocks for investors in their host countries and its implications for diversification across industries and countries. The availability of foreign stocks allows domestic investors to increase their international diversification from home by investing in these stocks. We conclude that including foreign stocks in portfolio investments offers an effective substitute for international diversification, and contributes significantly towards increasing the integration of global markets.",
keywords = "country/industry effects, foreign stocks, international capital markets, international diversification",
author = "{Bermejo Boixareu}, {Vicente Jose} and Campa, {Jos{\'e} M.} and Campos, {Rodolfo G.} and Mohammed Zakriya",
note = "Funding Information: We have benefited from comments by the editor (John A. Doukas), an anonymous referee, Javier D{\'i}az‐Gim{\'e}nez, Ilias Filippou, Pedro {\'A}ngel Garc{\'i}a Ares, Gonzalo G{\'o}mez Bengoechea, Mar{\'i}a Guti{\'e}rrez Urtiaga, Pablo Ruiz Verd{\'u}, Josep Trib{\'o}, Lucciano Villacorta, Daniel Wolfenzon, and participants at Universidad Carlos III and the FREE seminar series. Vicente J. Bermejo acknowledges financial assistance from the International Mobility Program UC3M and the Spanish Ministry of Science, Innovation and Universities under PGC2018‐099700‐A‐100. Mohammed Zakriya is thankful for financial support from the Government of Catalonia (grants 2017‐FI_B‐00502, 2018‐FI_B‐00170, and 2019‐FI_B2‐00163). The views expressed in this article are those of the authors and do not necessarily represent the views of Banco de Espa{\~n}a or the Eurosystem. Funding Information: We have benefited from comments by the editor (John A. Doukas), an anonymous referee, Javier D{\'i}az-Gim{\'e}nez, Ilias Filippou, Pedro {\'A}ngel Garc{\'i}a Ares, Gonzalo G{\'o}mez Bengoechea, Mar{\'i}a Guti{\'e}rrez Urtiaga, Pablo Ruiz Verd{\'u}, Josep Trib{\'o}, Lucciano Villacorta, Daniel Wolfenzon, and participants at Universidad Carlos III and the FREE seminar series. Vicente J. Bermejo acknowledges financial assistance from the International Mobility Program UC3M and the Spanish Ministry of Science, Innovation and Universities under PGC2018-099700-A-100. Mohammed Zakriya is thankful for financial support from the Government of Catalonia (grants 2017-FI_B-00502, 2018-FI_B-00170, and 2019-FI_B2-00163). The views expressed in this article are those of the authors and do not necessarily represent the views of Banco de Espa{\~n}a or the Eurosystem. Publisher Copyright: {\textcopyright} 2020 John Wiley & Sons Ltd.",
year = "2020",
month = nov,
day = "1",
doi = "10.1111/eufm.12275",
language = "English",
volume = "26",
pages = "1191--1223",
journal = "European Financial Management",
issn = "1354-7798",
publisher = "Wiley-Blackwell Publishing Ltd",
number = "5",
}