Journals / Uluslararası Yönetim İktisat ve İşletme Dergisi / 2006 / Cilt: 2 - Sayı: 3
THE EFFECT OF FOREIGN INVESTMENTS ON THE VOLATILITY OF EMERGING STOCK MARKETS
- Pages
- 15–40
- DOI
- —
Abstract
Foreign investors play an important role in emerging stock markets. When the economic or financial crisis begins in one of the emerging markets, foreign investors react immediately and selI the stocks not only in that country, but also in other emerging markets simultaneously. This causes all the emerging stock markets to spiral down and increases the volatility and foreign currency reserve problem. As a result, foreign investors view emerging market investments as different assets class and make comparison to each other, and not by comparing each market to the world portfolio
Özet
Foreign investors play an important role in emerging stock markets. When the economic or financial crisis begins in one of the emerging markets, foreign investors react immediately and selI the stocks not only in that country, but also in other emerging markets simultaneously. This causes all the emerging stock markets to spiral down and increases the volatility and foreign currency reserve problem. As a result, foreign investors view emerging market investments as different assets class and make comparison to each other, and not by comparing each market to the world portfolio.