Abstract

http://ssrn.com/abstract=2344817
 
 

Citations (3)



 


 



Emerging Equity Markets in a Globalizing World


Geert Bekaert


Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Campbell R. Harvey


Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

May 20, 2014


Abstract:     
Given the dramatic globalization over the past twenty years, does it make sense to segregate global equities into “developed” and “emerging” market buckets? We argue that the answer is still yes. While correlations between developed and emerging markets have increased, the process of integration of these markets into world markets is incomplete. To some degree, this accounts for the disparity between emerging equity market capitalization in investable world equity market benchmarks versus emerging market economies in the world economy. Currently, emerging markets account for more than 30% of world GDP. However, they only account for 12.6% of world equity capitalization. This incomplete integration along with the relatively small equity market capitalization should be taken into account in portfolio allocation. Other asset classes within emerging markets (such as corporate bonds and currencies) are also viable.

Number of Pages in PDF File: 28

Keywords: Emerging markets, GDP weights, Market integration, Market segmentation, Illiquidity, Liquidity, Portfolio risk, Portfolio correlation, Market capitalization, Risk characteristics, Cross-sectional volatility, Valuation ratios, Asset class

JEL Classification: G11, G15, G18, G24, F36

working papers series


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Date posted: October 26, 2013 ; Last revised: May 21, 2014

Suggested Citation

Bekaert, Geert and Harvey, Campbell R., Emerging Equity Markets in a Globalizing World (May 20, 2014). Available at SSRN: http://ssrn.com/abstract=2344817 or http://dx.doi.org/10.2139/ssrn.2344817

Contact Information

Geert Bekaert
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Campbell R. Harvey (Contact Author)
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-7768 (Phone)
919-660-8030 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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