Emerging Markets Have Emerged

2016 ◽  
Author(s):  
Marko Dimitrijević ◽  
Timothy Mistele
Keyword(s):  
Corporate Governance ◽  
Emerging Markets ◽  
Financial Markets ◽  
Government Policies ◽  
Developed Markets ◽  
The One

Argues that emerging markets have emerged; the traditional distinctions between emerging and developed markets—the size of their economies, the size of their financial markets, corporate governance, government policies, even growth—have blurred or disappeared; the one surviving distinction between them is the price you pay for growth.

scholarly journals Corporate governance and firm performance: Evidence from an emerging market

2019 ◽  
Vol 9 (1) ◽  
pp. 45-52 ◽  
Author(s):  
Ahmed S. Alanazi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Emerging Markets ◽  
Regression Models ◽  
Emerging Market ◽  
Operating Performance ◽  
Listed Firms ◽  
Developed Markets ◽  
Two Samples ◽  
And Performance

The paper investigates the link between corporate governance scores and firm performance among the largest 90 listed companies on the Saudi Stock market. The sample of 90 listed firms is split into two samples: firms with high governance scores and firms with low governance scores. The research compares and contrasts the operating performance of the two samples. In addition, regression models are used to test the link between governance scores and performance. No link between the companies’ corporate governance scores and operating performance is found. It is difficult to capture all elements of the complex corporate governance topic in corporate governance scores. It seems that corporate governance in emerging markets lags far behind that of developed markets. This is the first paper to examine the link between corporate governance scores and operating performance in the Saudi market, a new emerging market that has not been examined. The paper adds to the debate in the literature whether there is a link between corporate governance scores and performance. The evidence in the literature is inconclusive.

Forecasting value at risk (VAR) for emerging and developed markets

2019 ◽  
Vol 37 (3) ◽  
pp. 133
Author(s):  
Viviane Naimy ◽  
Melissa Bou Zeidan
Keyword(s):  
Emerging Markets ◽  
Value At Risk ◽  
Predictive Ability ◽  
Historical Simulation ◽  
Confidence Levels ◽  
Developed Markets ◽  
Out Of Sample ◽  
Weighted Model ◽  
The One ◽  
Modelling And Forecasting

This paper explores different approaches to modelling and forecasting VaR, using both historical simulation and volatility-weighted bootstrap methods, where volatility is estimated using GARCH (1,1) and EGARCH (1,1). It examines the one day predictive ability of three historical simulation VaR models at the 90%, 95%, and 99% confidence levels for developed and emerging equity markets for the period 2011- 2017 that witnessed difficult and extreme market conditions. 870 scenarios of future returns are generated for each of the 500 days representing the out of sample period extending from March 2015 up to January 2017 in order to estimate the corresponding VaR for both markets. The GARCH (1,1) volatility-weighted model is accepted for both markets and is classified as the best performing model. The EGARCH (1,1) volatility-weighted model’s results were inconclusive; in fact, the back-test was accepted at all confidence levels for the developed markets while rejected at the 99% confidence level for the emerging markets. The basic historical simulation failed in estimating an accurate VaR for the emerging markets.

Heterogeneous investors and deterioration of market integrity: an analysis of market manipulation cases

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Qasim Shah ◽  
Izlin Ismail ◽  
Aidial Rizal bin Shahrin
Keyword(s):  
Emerging Markets ◽  
Financial Markets ◽  
Institutional Investors ◽  
Individual Investors ◽  
Market Manipulation ◽  
Content Type ◽  
Developed Markets ◽  
Individual Ownership ◽  
The Empirical Analysis

Purpose The purpose of this study is to empirically test the role of heterogeneous investor’s, i.e. institutional investors, individuals and insiders in deteriorating market integrity. Design/methodology/approach The research is conducted by examining the participants of 244 market manipulation cases of East Asian emerging and developed financial markets for the period of 2001–2016. The empirical analysis is conducted using panel logistic regression. Findings The results show that firms with higher institutional ownership are most likely to be manipulated in both markets. Insiders are potential manipulators in developed markets and deteriorate market integrity. In contrast, individual investors behave differently in both markets. In developed markets, firms with high individual ownership are less likely to be manipulated while in emerging markets, firms with individual ownership are more prone to manipulation because of substantial participation by individual investors which invites manipulative practices. Additionally, the authors found that firms with a higher proportion of passive institutional investors are less likely to be manipulated in emerging markets. Originality/value This study contributes to the existing literature by identifying the potential manipulators in the financial markets who deteriorate market integrity with the additional focus of subdivision of institutional investors as active institutional investors and passive institutional investor. The findings are helpful for regulators in designing policies to ensure market integrity and to enforce the role of institutional investors and insiders.

scholarly journals Financial System and Corporate Governance Around the World. Lessons for Emerging Markets

2013 ◽  
Vol 7 (1) ◽  
pp. 59-70
Author(s):  
Nicola Miglietta ◽  
Enrico Battisti
Keyword(s):  
Corporate Governance ◽  
Emerging Markets ◽  
Network Governance ◽  
Anglo Saxon ◽  
Active Involvement ◽  
Developed Markets ◽  
Corporation Law ◽  
The World ◽  
The Board Of Directors ◽  
India And China

Authors: Nicola Miglietta Enrico Battisti This work explores the main features of the models of Corporate Governance around the world. The goal is to verify the existence of an optimal model of Corporate Governance that could be a datum point for Emerging Markets. Corporate Governance is deeply tied to different Financial Systems. Usually a Corporation is a kind of partnership amongst managers – employees who operate the firm and commit human resource instead of financial capital – and outside investors. Its financial objective is to maximize shareholders’ value. According to United States and United Kingdom Corporation Law, managers are legally required to act in the interests of the shareholders. In this sense, the Board of Directors is supposed to represent shareholders’ interest, however laws and traditions differ from country to country and it is common to distinguish in between market-based and bank-based systems.We could divide the article in two parts. The first part explores the relations between Corporate Finance and Corporate Governance. The second one examines the Developed Markets’ Corporate Governance Models (Anglo-Saxon Countries, Germany, Japan, Italy) and the Emerging one (most notably Brazil, Russian Federation, India and China) in order to identify if the differences between countries can be regarded as more or less relevant. In conclusion, the work highlights the key elements of a Corporate Governance pointing out social and company’ benefits and it identifies in a system of Network Governance, founded on a more active involvement of all stakeholders, a reference point for the Emerging Markets.

scholarly journals Assessing The Markets Reaction To The Dodd-Frank Act

2012 ◽  
Vol 10 (10) ◽  
pp. 569 ◽  
Author(s):  
George Turk ◽  
Philip Swicegood
Keyword(s):  
Financial Markets ◽  
Consumer Protection ◽  
Market Reaction ◽  
Positive Response ◽  
Legislative Process ◽  
Wall Street ◽  
Developed Markets ◽  
Consumer Protection Act ◽  
The One

In this paper, we exam how the financial markets reacted to the emergence of the Dodd-Frank Wall Street Reform and Consumer Protection Act as it developed through the legislative process from policy concept to signed law. We find that investors, on the one hand, desired clarity and sustainable oversight of market activities, but simultaneously feared the possibility of over-burdensome regulation. As the legislative process developed, markets cheered any watering down of perceived over-restrictive provisions with a positive response. We also empirically noted the smaller banks stocks were generally unaffected by the entire emergence of Dodd-Frank, with nearly all of the market reaction (positive and negative) occurring with larger banks stocks.

scholarly journals Emerging Markets And Ipos Hooking Up On The Global Horizon

2011 ◽  
Vol 6 (10) ◽  
Author(s):  
Rahul Bishnoi
Keyword(s):  
Emerging Markets ◽  
Initial Public Offerings ◽  
Latin American ◽  
Pension Funds ◽  
Hooking Up ◽  
General Definition ◽  
Public Offerings ◽  
Developed Markets ◽  
Recent Developments ◽  
The One

An analysis of the difficult past year shows that emerging markets have actually held their value more successfully than developed markets, with declines of considerably smaller magnitude than those seen in the U.S., Europe and developed Asia. The focus of this paper is on the emerging markets of Latin America and Asia where funds are up more than 50 percent this year after returning nearly 40 percent in 2004 and more than 60 percent in the previous year. After years of doldrums triggered by Brazil's devaluation of the real and the subsequent Argentine crisis, capital markets are regaining strength. In Chile and Brazil, for instance, mergers and acquisitions are on the rise and stock offerings are back in fashion. Even retail investors have joined institutional investors in participating in Initial Public Offerings (IPOs), such as the one from Chile's second-largest department store, Bipley. Pension funds also have been important to financing, particularly for Chile's biggest companies, though the private pension funds are near their legal limit for equity investments. The first section of the paper focuses on a general definition and characteristics of the global emerging markets. The second section of the paper concentrates on the Latin American Equity and Bond market with special attention towards the performance of the markets over the past year. The final section looks at the recent developments of the region, risks of the region and concludes with suggested policies for the future.

scholarly journals Corporate governance and firm valuation in emerging markets: evidence from UAE listed companies in the Middle East

2013 ◽  
Vol 11 (1) ◽  
pp. 637-656
Author(s):  
Mohamed Adawi ◽  
Kami Rwegasira
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
Emerging Markets ◽  
Financial Markets ◽  
Listed Companies ◽  
Firm Valuation ◽  
Tobin's Q ◽  
Governance Indicators ◽  
Company Valuation ◽  
Price Earnings Ratio

There has been previous empirical research on corporate governance and board of directors which focused on attempting to find a direct relationship between internal governance variables and firm valuation. It has however also been argued that there are differences in the nature, direction, magnitude and processes of operation of this relationship between developed and developing financial markets because of differences in their respective economic, social, regulatory framework and market behaviour . This study examines this relationship in the context of the United Arab Emirates (UAE) as one of the emerging markets in order to extend evidence further beyond the western developed capital markets into the Middle East. Does the prevalence of family-ownership in the UAE for example matter to the company valuation? What about the presence of institutional ownership or ownership concentration? And do the corporate communication and disclosure scores published by the UAE Institutional Investor in cooperation with Hawkamah, The Institute for Corporate Governance; have any relationship to corporate valuation? More specifically this study, using multiple regression analysis, examines the impact of firm level internal corporate governance indicators namely board structure, ownership structure, and transparency and disclosure governance practices on the valuation of listed companies in the UAE after controlling for company size, industry, leverage, and dividend payout using Tobin’s Q, Price - Earning Ratio (PER) and Price - Book Value Ratio (PBVR) as surrogates for company valuation. The results show no significant relationship between internal corporate governance indicators and company valuation when using Tobin’s Q and PBR as measures of company valuation. However they reveal statistically significant links between some of the internal corporate governance indicators on the one hand and company market valuation on the other when company valuation is measured by the price earnings ratio (PER) which is one of the most common and important stock market indicators for investors. These results suggest that the company valuation measures like the price earnings ratio which explicitly reflects the financial markets assessment of the firm investment and dividend policies lead to a better correlation with internal corporate governance indicators. Moreover, the regression results indicate that the frequency of board meetings, adoption of best transparency practices and the presence of private institutional investors such as sovereign wealth funds are the most significant internal corporate governance variables in accounting for differences in company market values in the UAE. The structural aspects of the board such as size and composition turned out not to be statistically significant in their impact on company valuation.

scholarly journals Linkage between Stock Market Prices and Exchange Rate: A Causality Analysis for Pakistan

2004 ◽  
Vol 43 (4II) ◽  
pp. 639-649 ◽  
Author(s):  
Mohammad Farooq ◽  
Wong Wing Keung
Keyword(s):  
Stock Market ◽  
Emerging Markets ◽  
Financial Markets ◽  
Emerging Economies ◽  
Stock Markets ◽  
Developing Economies ◽  
Causality Analysis ◽  
Market Prices ◽  
Financial Architecture ◽  
Developed Markets

Globalisation and financial sector reforms in developing economies have ushered in a sea change in the financial architecture of the economies. In the contemporary scenario, the activities in the financial markets and their relationships with the real sector have assumed significant importance. Correspondingly, researches are also being conducted to understand the current working of the economic and the financial system in the new scenario. Interesting results are emerging particularly for the developing countries where the markets are experiencing new relationships which are not perceived earlier. The analysis on stock markets has come to the fore since this is the most sensitive segment of the economy. The stock markets of emerging economies have been of vital importance to the global investment community. Since emerging markets are more volatile than the well developed stock market, therefore the emerging markets tend to be unrelated to one another and with the developed markets. Numerous investors worldwide select to diversify their funds across the emerging markets.

scholarly journals On the Bound of Cumulative Return in Trading Series

2020 ◽  
Author(s):  
Yang Can ◽  
Junjie Zhai ◽  
Helong Li
Keyword(s):  
Emerging Markets ◽  
Financial Markets ◽  
Upper Bound ◽  
Stock Markets ◽  
Trading Strategies ◽  
Trading Rules ◽  
Empirical Results ◽  
Developed Markets ◽  
International Stock Markets ◽  
Bootstrap Methodology

Abstract There is no doubt that cumulative return is one of fundamental concerns in financial markets. In this paper, we first reveal the upper bound of cumulative return, and then propose a method to evaluate the performance of trading strategies by using proposed upper bound. Furthermore, with the help of bootstrap methodology, we conduct numerous experiments on distinct international stock markets, including developed markets and emerging markets, to verify the validity of the proposed upper bound. And both the theoretical and empirical results show that the effectiveness of the proposed upper bound and reveal its significant potentials on evaluating performance of trading rules.

scholarly journals The effectiveness of governance mechanisms in emerging markets: A review

2020 ◽  
Vol 17 (3) ◽  
pp. 8-26
Author(s):  
Mohammad Refakar ◽  
Nivo Ravaonorohanta
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Emerging Markets ◽  
Dividend Policy ◽  
Board Structure ◽  
Governance Mechanisms ◽  
External Audit ◽  
Developed Markets

Corporate governance has advanced hugely in the last two decades and many governance best practices have emerged that focuses on measures companies should take in order to improve their governance. These suggested mechanisms are effective in developed markets because they are a remedy for problems that occur in those markets. But are these mechanisms also effective in emerging markets? By reviewing the literature, this paper critically discusses and compares the effectiveness of governance mechanisms (both internal and external) in emerging and developed markets and finds that while the classic mechanisms such as board structure and independence are not effective in emerging markets, there exist some alternative mechanisms such as external audit or dividend policy that are more effective.

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