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Journals / ODTÜ Gelişme Dergisi / 2010 / Cilt: 37 - Sayı: 1

Diversification effect of global risk perceptions in developing countries

Gelişmekte olan ekonomilerde global risk algılamasının çeşitlendirme etkisi

Hacıhasanoğlu ERK
UĞUR SOYTAŞ
Pages
41–52
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Although the results of the study partially support the claim that changes in global risk perception have an impact on contagion of crises across emerging markets in the short run, it is also shown that investors with a long term concern can benefit from international diversification.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:As financial systems become more integrated, investors have started to diversify more to reduce the portfolio risk.
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Key Findings & Data:In the literature, it is argued that fluctuations in global risk perceptions have an impact on contagion of crises.
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Conclusion & Impact:Although the results of the study partially support the claim that changes in global risk perception have an impact on contagion of crises across emerging markets in the short run, it is also shown that investors with a long term concern can benefit from international diversification.
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters

Abstract

As financial systems become more integrated, investors have started to diversify more to reduce the portfolio risk. In the literature, it is argued that fluctuations in global risk perceptions have an impact on contagion of crises. In this article, we investigate the effect of global risk perceptions on credit default spreads of emerging markets. Although the results of the study partially support the claim that changes in global risk perception have an impact on contagion of crises across emerging markets in the short run, it is also shown that investors with a long term concern can benefit from international diversification.

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Cite This Article

ERK, H., SOYTAŞ, U. (2010). Diversification effect of global risk perceptions in developing countries. ODTÜ Gelişme Dergisi, Cilt: 37 - Sayı: 1, 41–52. https://ajindex.com/articles/292011

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