Housekeeping and Plumbing: TheInvestability of Emerging Markets

Ladekarl, Jeppe ; Zervos, Sara

World Bank, Washington, D.C.

关键词: ACCOUNTING;    AFFILIATES;    ASSET MANAGEMENT;    ASSETS;    ASSETS;   

DOI  :  10.1596/1813-9450-3229
RP-ID  :  WPS3229

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors look at the investmentallocation process employed by portfolio investors inemerging markets. In particular, they examine the first of atwo-stage decision process: first, investors create a subsetof countries with investments potential, to be analyzedlater in further detail; second, they weigh expected returnsversus risk and subsequently allocate their funds. Theauthors hypothesize that the determination of whether acountry has potential investment opportunities, or not isinfluenced by a number of factors, especially related tosize, quality of "housekeeping," (macroeconomicpolicies, political economy, local financial markets,corporate governance, and so on), and efficiency of"plumbing" (legal and regulatory framework,custody, clearing and settlement, taxes, and so on). Byinterviewing many types of these investors in both theUnited States and the United Kingdom, the authors delve intotheir decision-making processes, as well as attempt touncover the factors they indicate, matter most in definingthe "investment opportunities" universe. Theydetermine the relative importance of such housekeeping, andplumbing factors while highlighting the role of externalissues, such as index benchmarking and U.S. foreign policy.The authors recognize from the outset that the most profoundeffects on investment flows, or the required minimumexpected returns, arise from improvements or deteriorationsin macroeconomic policies. However, at the margin,improvements can be made in country policies that will, fora given macroeconomic situation, improve the ability of acountry to attract international investment flows.