Pension funds are associated with various implications of international investment. As the chapter makes an analysis of Table 6.12, it shows that this investment has experienced significant growth since 1980 and although it entails large volumes, studies have only been focused on the relatively small part of this portfolio. There are several options for attaining further growth in terms of the portfolio shares in some countries. While international investment may be found to be beneficial for pension funds, it is important to consider that this also entails a tendency of major significance in terms of world economy and financial market development that has various implications for economic efficiency. This chapter first provides an analysis of the grounds for international diversification, examines supporting data, investigates the reasons for the behavioural differences and the recent experience of various pension-fund sectors, and identifies the micro and macro level economic implications of international investment.
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