BENEFITS FROM INTERNATIONAL DIVERSIFICATION: INDIAN EXPERIENCES

Malay Kanti Roy (), Hirak Ray () and Tamojit Roy
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Malay Kanti Roy: Department of Commerce University of North Bengal India, West Bengal
Hirak Ray: Department of Commerce University of North Bengal India, West Bengal
Tamojit Roy: Research Scholar, NBU

Journal Articles, 2012, 5-16

Abstract: Investing beyond border reduces risk compared to traditional domestic investment; this assertion is well founded by numerous researches in financial economics. The benefit virtually emerges from two sources. Increase in the number of investible countries that widen scope of international diversification and less than perfect correlation among world markets that essentially helps in risk reduction. Thus "widening scope" and nature of co movement among markets are the two main sources of benefit from international diversification. The study, however suggests that due to various restrictions coupled with "home bias", international investors still rely on domestic market that suggests diversification inefficiency.

Keywords: Portfolio investment; International financial markets; Diversification; Risk reduction; Co variance (search for similar items in EconPapers)
JEL-codes: F31 G10 G15 (search for similar items in EconPapers)
Date: 2012
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