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Emerging market benefits, investability and the rule of law

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  • Buchanan, Bonnie G.
  • English II, Philip C.
  • Gordon, Rachel
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    Abstract

    We revisit the Barry, Peavy and Rodriguez (1998) paper and investigate the underlying source of emerging market performance benefits. We classify stocks according to their investability and legal origin. Emerging markets continue to represent the performance benefits they had during the Barry et al. (1998) period by providing not only return enhancement but primarily risk-reduction. More specifically, we find that an investor can achieve greater benefits by focusing on a limited set of emerging markets with a French civil law foundation and that are moderately investable stocks.

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    File URL: http://www.sciencedirect.com/science/article/B6W69-511K3W4-1/2/ba7fe895342a1d6956847467bf45baa0
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    Bibliographic Info

    Article provided by Elsevier in its journal Emerging Markets Review.

    Volume (Year): 12 (2011)
    Issue (Month): 1 (March)
    Pages: 47-60

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    Handle: RePEc:eee:ememar:v:12:y:2011:i:1:p:47-60

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    Web page: http://www.elsevier.com/locate/inca/620356

    Related research

    Keywords: Investability Law and finance Emerging markets;

    References

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    Cited by:
    1. Marcelo Bianconi & Joe A. Yoshino & Mariana O. Machado de Sousa, 2011. "BRIC and the U.S. Financial Crisis: An Empirical Investigation of Stocks and Bonds Markets," Discussion Papers Series, Department of Economics, Tufts University 0764, Department of Economics, Tufts University.
    2. Kutan, Ali M. & Ozsoz, Emre & Rengifo, Erick W., 2012. "Cross-sectional determinants of bank performance under deposit dollarization in emerging markets," Emerging Markets Review, Elsevier, vol. 13(4), pages 478-492.
    3. Hayat, Raphie & Kraeussl, Roman, 2011. "Risk and return characteristics of Islamic equity funds," Emerging Markets Review, Elsevier, vol. 12(2), pages 189-203, June.

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