I’m no fan of home bia for the sake of asset allocation, though I do like home bia as a way to bolster access to capital condition for local companies, which should benefit local economy and help with our standard of living, on a really, really small actual effect basis.
That being said, I would say that if the local economy skyrockets, prices of goods and services are likely to go up as local wages hopefully increase, holding stock of local companies may help mitigate that by also increasing the value of our assets (that can be sold or provide increased income through dividends).
Our local government is also more likely to intervene in case of a crash of the local economy, providing us with a potential safety net against such a crash which we wouldn’t have if things got dire for companies for which we are foreign investors.
I don’t think that really works out in Switzerland, where most of the tradable companies are international behemots and the average investor doesn’t really have access to a market of local companies (which are mostly private SMEs) but it might for other economies.