The Promise and Limits of Financial Engineering in Emerging Markets

18 Pages Posted: 24 Apr 2000

See all articles by Claire A. Hill

Claire A. Hill

University of Minnesota Law School


This paper considers why quality enhancement is sometimes, but not always, available for emerging markets financial instruments. It concludes that sometimes, but not always, economies of scope will permit quality enhancement to be provided at a cost lower than the associated benefit. These economies of scope are available when political risk is below a certain level; if political risk is, or is perceived to be, at or above that level, quality enhancement will not be available, except on terms likely not to be worthwhile for an emerging markets firm. More broadly, the increment of quality enhancement that can be exploited is limited. However, financial engineering has shown some promise in increasing the exploitable increment.

JEL Classification: F21, F34, G15, G32, K22

Suggested Citation

Hill, Claire Ariane, The Promise and Limits of Financial Engineering in Emerging Markets. Available at SSRN: or

Claire Ariane Hill (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-6521 (Phone)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics