Does purchasing stock in Australian multinational corporations create international portfolio diversification?

Wright, April and McCarthy, Scott (2002) Does purchasing stock in Australian multinational corporations create international portfolio diversification? Multinational Business Review, 10 (1). pp. 79-83. ISSN 1525-383X

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Abstract

While Australia leads the United States in direct stock ownership by private individuals, Australian investors perceive foreign shares as risky and question if the benefits of international portfolio diversification can be achieved by purchasing shares in multinational corporations. Attempting to answer this question, this study compares the weekly returns, total risk and Beta of a portfolio of Australian based multinational corporations (MNC) to a portfolio of Australian domestic companies. Given that the MNC Beta exceeds the domestic Beta yet the returns are not statistically different, investment in MNC shares does not appear to provide international diversification benefits to Australian shareholders.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Faculty / Department / School: Historic - Faculty of Business - Department of Finance and Banking
Date Deposited: 30 Nov 2007 11:47
Last Modified: 02 Jul 2014 01:25
Fields of Research : 15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150308 International Business
15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
14 Economics > 1402 Applied Economics > 140210 International Economics and International Finance
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970114 Expanding Knowledge in Economics
URI: http://eprints.usq.edu.au/id/eprint/14253

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