Characteristics of Emerging Economies

Wei Li, R. Bruner, R. M. Conroy, Richard Hoyer-Ellefsen
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Abstract

Today, roughly 30 countries are classified as "emerging markets" by the World Bank. Investor interest in these markets has grown substantially over time. During the first half of the 1990s, privatization and economic liberalization that took place across emerging market countries substantially enlarged the set of emerging market securities available to foreign investors and thereby provided a strong and decisive impulse for portfolio investments in emerging markets. The purpose of this technical note is to describe some key characteristics of emerging capital markets and compare them with those of developed and less-developed or frontier markets. This technical note is the first of three notes on emerging markets. See also UVA-F-1454 and UVA-F-1455. Excerpt UVA-F-1453 Investing in Emerging Markets Technical Note Series No. 1 CHARACTERISTICS OF EMERGING MARKETS Today, roughly 30 countries are considered to be in transition to higher levels of economic development and have hence earned the title “emerging markets” from the International Finance Corporation (IFC) of The World Bank. Initially (in 1981) the IFC emerging market index included stocks of publicly traded companies from nine countries. By 2002, the total number of countries covered in the IFC emerging market indices had reached 33. Standard & Poor's acquired the IFC indices in January 2000, and they are now known as the S&P/IFC indices. Investor interest in emerging markets has grown over time. Before 1980, little capital flowed into these markets due to the lack of financial products and services available to foreign investors and the perceived high market risk and volatility. Beginning in 1981, private portfolio investment in the emerging markets began to grow. During the first half of the 1990s, the privatization and economic liberalization that took place across emerging market countries substantially enlarged the set of emerging market securities available to foreign investors, who thereby developed a strong and decisive interest in them for portfolio investments. Net portfolio inflows to emerging markets peaked in 1994 at $ 113 billion, only to decrease sharply in the following years, mainly due to the widespread financial turmoil that affected these markets (the “Tequila Effects,” kicked off by the devaluation of the Mexican peso). The purpose of this technical note is to describe some key characteristics of emerging capital markets and compare them with those of developed and less-developed, or frontier, markets. Although other emerging market indices are available (e.g., Morgan Stanley's Capital International [MSCI] index), the S&P/IFC cohort is used in this technical note, because it includes a broader set of countries than competing indices. S&P/IFC considers a market to be “emerging” if it meets at least one of the following criteria: 1. It is in a low- or middle-income country, as defined by the World Bank, and . . .
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新兴经济体的特点
今天,大约有30个国家被世界银行列为“新兴市场”。随着时间的推移,投资者对这些市场的兴趣大幅增长。在20世纪90年代上半叶,新兴市场国家的私有化和经济自由化大大扩大了外国投资者可以获得的新兴市场证券,从而为新兴市场的证券投资提供了强大而决定性的推动力。本技术说明的目的是描述新兴资本市场的一些关键特征,并将其与发达市场和欠发达市场或前沿市场进行比较。这份技术报告是有关新兴市场的三份报告中的第一份。参见UVA-F-1454和UVA-F-1455。今天,大约有30个国家被认为正在向更高水平的经济发展过渡,因此获得了世界银行国际金融公司(IFC)的“新兴市场”称号。最初(1981年),IFC新兴市场指数包括来自9个国家的上市公司股票。到2002年,国际金融公司新兴市场指数涵盖的国家总数已达到33个。标准普尔于2000年1月收购了IFC指数,现在被称为标准普尔/IFC指数。随着时间的推移,投资者对新兴市场的兴趣日益浓厚。1980年以前,由于缺乏可供外国投资者使用的金融产品和服务以及市场风险和波动性高,流入这些市场的资本很少。从1981年开始,新兴市场的私人证券投资开始增长。在20世纪90年代上半叶,新兴市场国家的私有化和经济自由化大大扩大了外国投资者可以获得的新兴市场证券,因此他们对这些证券产生了强烈而决定性的兴趣,用于证券投资。流入新兴市场的净投资组合在1994年达到了1130亿美元的峰值,但在接下来的几年里急剧减少,主要是由于影响这些市场的广泛金融动荡(“龙舌兰效应”,由墨西哥比索贬值引发)。本技术说明的目的是描述新兴资本市场的一些关键特征,并将其与发达市场和欠发达市场或前沿市场进行比较。尽管其他新兴市场指数也可用(例如摩根士丹利的资本国际[MSCI]指数),但在本技术报告中使用的是标准普尔/国际金融公司的队列,因为它比竞争指数包括更广泛的国家。标准普尔/国际金融公司认为一个市场是“新兴”的,如果它至少满足以下标准之一:按照世界银行的定义,它属于低收入或中等收入国家,而且……
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