A Review of Research into Emerging Stock Markets

Abstract

Emerging stock markets have been the subject of extensive scrutiny since their emergence as a separate investment category some twenty years ago. This review article explores the major debates which have taken place in the emerging stock market literature, including (1) the definition of what constitutes an emerging stock market, (2) the diversification benefits of incorporating equities from emerging markets into an investment portfolio, (3) the predictability of returns in emerging stock markets and (4) the character and volatility of emerging market equity returns. This review analyses the existing research into emerging markets and also indicates areas where future research might prove useful.