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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

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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  • Buchanan, Bonnie G. & English II, Philip C. & Gordon, Rachel, 2011. "Emerging market benefits, investability and the rule of law," Emerging Markets Review, Elsevier, vol. 12(1), pages 47-60, March.
    • Handle: RePEc:eee:ememar:v:12:y:2011:i:1:p:47-60
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    14. 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.
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