Emerging Market Benefits, Investability and the Rule of Law

26 Pages Posted: 28 Jul 2010 Last revised: 14 Sep 2010

See all articles by Bonnie Buchanan

Bonnie Buchanan

Surrey Business School, University of Surrey

Philip C. English

American University - Kogod School of Business; Fox School of Business, Temple University

Rachel Gordon

American University - Kogod School of Business

Date Written: July 27, 2010

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 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, F3

Suggested Citation

Buchanan, Bonnie and English, Philip C. and Gordon, Rachel, Emerging Market Benefits, Investability and the Rule of Law (July 27, 2010). Available at SSRN: https://ssrn.com/abstract=1649808 or http://dx.doi.org/10.2139/ssrn.1649808

Bonnie Buchanan (Contact Author)

Surrey Business School, University of Surrey ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

Philip C. English

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
202-885-2745 (Phone)

Fox School of Business, Temple University ( email )

Philadelphia, PA 19122
United States
2152048141 (Phone)

Rachel Gordon

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

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