We estimate a model with countryand industry-specific shocks that extends the dummy variable model used in the portfolio diversification literature by relaxing the restriction that all stocks with exposure to a given shock have the same exposure to that shock. We find that: i) This restriction is strongly rejected by the data. ii) Many industry betas are negative, while almost all country betas...

The empirical studies to date have not found consistent support for the performance advantages of international diversification. One reason suggested by internalization theory is that leveraging firm specific assets is critical for enhancing performance from international diversification. We develop and empirically test the hypothesis that investment in information technology helps in leveragin...

Using data from 1990-2013, we show 1) the serial correlation of analyst forecast errors increases in the extent of international diversification, 2) PEAD based on analyst forecast errors increases in the extent of international diversification, and 3) the impact of international diversification on the serial correlation of analyst forecast errors and the associated drift is significantly reduce...

using advanced techniques of econometrics and a metaheuristic optimization approach, this study attempts to evaluate the potential advantages of international portfolio diversification for east asian international investors when investing in the middle eastern emerging markets. overall, the results of both econometric and the metaheuristic optimization methods are supporting each other. finding...

Developmental plans of the country emphasize on the exports-focused growth strategy, and export diversification is one of the most appropriate policies in this area. Export diversification moves from primary goods to industrial goods. Yet, export diversification, according to the principles of international trade, must be based on comparative advantage until to change value-added. Changes in th...

The study of diversification and firm performance lies at the heart of the strategy literature (Dess, Gupta, Hennart, & Hill, 1995). Nevertheless, in spite of all the efforts of researchers to untangle the diversificationperformance relationship milieu, there is still much confusion surrounding this vital issue. One potential source of confusion centers on the type of diversification being purs...

Opinions expressed herein do not necessarily concur with the Federal Reserve Board or any other employees of the Federal R.eserve System. The authors are also grateful co Stephen Brown for providing some of the international stock market data. Some of the UK stock market data used in the analysis herein were extracted from the London Share Price Database, which is a copyright work of the L,ondo...