The Unique Investment Risks of the Emerging Financial Markets


Söylemez A. O.

in: Strategic Design and Innovative Thinking in Business Operations: The Role of Business Culture and Risk Management, Hasan Dinçer,Ümit Hacıoğlu,Serhat Yüksel, Editor, Springer, London/Berlin , Zug, pp.373-390, 2018

  • Publication Type: Book Chapter / Chapter Research Book
  • Publication Date: 2018
  • Publisher: Springer, London/Berlin 
  • City: Zug
  • Page Numbers: pp.373-390
  • Editors: Hasan Dinçer,Ümit Hacıoğlu,Serhat Yüksel, Editor

Abstract

The significance of the Emerging Financial Markets (EFMs) is on a steady rise. They offer significant advantages for international investors such as high yields and broader chance of global portfolio diversification. However, there exist unique risks of investments in EFMs that should be carefully observed. This article is a summary those risks such as the risk of survival bias, non-normality of returns, the peso problem, contagion issues, commodity and natural resource curse among other problems that investors should pay attention to in EFMs. At the end, a top-down analysis approach is recommended in this article to those investors who will invest in EFMs.