The relative strengths of industry versus country factors can be of major importance for global equity portfolio managers. If country effects dominate, then primary consideration can be given to the country allocation decision. On the other hand, if global economic integration is reducing the distinctions between countries, then an industry-first investment process may be more appropriate. This MSCI paper, by Jose Menchero and Andrei Morozov, investigates industries versus countries in global equity markets.
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