Emerging Market Benefits, Investability and the Rule of Law
Seattle University - Albers School of Business and Economics
Philip C. English
American University - Kogod School of Business
Drexel University - Bennett S. LeBow College of Business
January 10, 2011
Emerging Markets Review, Forthcoming
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 BPR (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.
Keywords: Investability, law and finance, emerging markets
JEL Classification: G15, F21, F3Accepted Paper Series
Date posted: January 10, 2011
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