Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/59159
Authors: 
Chabot, Benjamin
Kurz, Christopher
Year of Publication: 
2009
Series/Report no.: 
Center Discussion Paper, Economic Growth Center 972
Abstract: 
Why did Victorian Britain invest so much capital abroad? We collect over 500,000 monthly returns of British and foreign securities trading in London and the United States between 1866 and 1907. These heretofore-unknown data allow us to better quantify the historical benefits of international diversification and revisit the question of whether British Victorian investor bias starved new domestic industries of capital. We find no evidence of bias. A British investor who increased his investment in new British industry at the expense of foreign diversification would have been worse off. The addition of foreign assets significantly expanded the mean-variance frontier and resulted in utility gains equivalent to a meaningful increase in lifetime consumption.
Subjects: 
capital markets
home bias
history
Victorian overseas investment
JEL: 
E44
F22
G11
G15
N21
N23
O16
Document Type: 
Working Paper

Files in This Item:
File
Size
254.52 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.