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

Article


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.
Article Title

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

ERA Journal ID31156
Article CategoryArticle
AuthorsWright, April (Author) and McCarthy, Scott (Author)
Journal TitleMultinational Business Review
Journal Citation10 (1), pp. 79-83
Number of Pages5
Year2002
Place of PublicationBingley, WYorks. United Kingdom
ISSN1525-383X
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.

ANZSRC Field of Research 2020350706. International business
350208. Investment and risk management
380110. International economics
Byline AffiliationsDepartment of Finance and Banking
Institution of OriginUniversity of Southern Queensland
Permalink -

https://research.usq.edu.au/item/q0641/does-purchasing-stock-in-australian-multinational-corporations-create-international-portfolio-diversification

Download files


Published Version
Wright_McCarthy_MBR_v10n1_PV.pdf
File access level: Anyone

  • 1662
    total views
  • 201
    total downloads
  • 0
    views this month
  • 2
    downloads this month

Export as

Related outputs

Managing foreign exchange transaction exposure: the alternatives
McCarthy, Scott. 2000. "Managing foreign exchange transaction exposure: the alternatives." National Accountant. 16 (3), pp. 52-55.
Foreign exchange exposure: an introduction
McCarthy, Scott. 2000. "Foreign exchange exposure: an introduction." National Accountant. 16 (1), pp. 44-47.
Foreign exchange transaction exposure management practices of Australian SMEs: an exploratory analysis
McCarthy, Scott. 1999. "Foreign exchange transaction exposure management practices of Australian SMEs: an exploratory analysis." Small Enterprise Research. 7 (2), pp. 29-42.