Relevance of trade facilitation in emerging countries' exports

The objective of this article is to analyse trade flows in emerging nations with a maritime boundary, where trade facilitation plays a decisive role in their international development. In order to detect possible patterns in performance, we apply the economic approach of gravity models using the World Bank Logistic Performance Index (LPI) as a good proxy of trade facilitation. The results of the estimation lead to the conclusion that the more complex the transportation of goods is, the more influential the logistics indicator, trade facilitation being most prominent in Middle East exporters.     

China's emerging securities market

China's phenomenal growth over the past decade has fostered numerous repercussions. Against the background of this high growth rate and a savings rate of close to 40%, alternative methods of financing economic activities were sought, giving rise to the emerging securities market. The authors analyze these markets, and predict that despite the real chance of several market crashes, the market will witness an historic bull run well into the next century.     

策略性地拓展新兴市场

就在世界将中国市场视为摆脱目前经济危机的潜在救世主时,中国出151商正以同样的方式开始关注新兴市场.东盟、中东、俄罗斯、印度,南美和非洲等新兴市场,正越来越显著地成为"中国制造"进军的新方向.我们要肯定一点,就是新兴市场占中国出口总额虽然只有15%,但是增长速度和增长空间远远高于成熟市场.     

An institutional work view toward the internationalization of emerging market firms

Through the lens of institutional work – the institutionally embedded practice that aims to create, maintain, or disrupt the rules and shared meanings in social life, we discuss how an emerging economy’s governments establish policies and regulations to develop outward foreign direct investment, and how domestic firms seek to shape these institutional arrangements to suit their interests and needs as they expand overseas. This study underscores the importance of the home country to multinational enterprises. We argue, the policymaking that underpins the internationalization of firms is not only a top-down (state inspired) but also a bottom-up process.     

Competing with emerging market multinationals

A new breed of multinationals from emerging markets is appearing in many industries. Western firms are wrong to underestimate, as they often do, the competitive threat from these firms. The discussion herein highlights the non-traditional competitive advantages these firms use to win at home and abroad and shows how these firms use internationalization not only to exploit competitive advantage but to bolster it. The article concludes with suggestions for how Western managers should respond to the competitive threat from emerging market multinationals.     

Consolidation and market structure in emerging market banking systems

This paper examines the evolution of market structure in emerging markets banking systems during the 1990s. While a significant process of bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the Panzar and Rosse (1987) methodology suggest that overall, markets have not become less competitive in a sample of eight European and Latin American countries. Lowering barriers to entry, such as allowing increased participation of foreign banks, appears to have prevented a decline in competitive pressures associated with consolidation.     

Export performance of emerging market firms

I investigate the export performance of firms from emerging economies based on resource based view (RBV) of a firm. Based on review of extant literature, I identify firm size, research and development expenditure, advertising expenditure and business group affiliation to be important antecedents of level of exporting activities of a firm. I utilize a two-stage least square estimation (G2SLS) on a sample of 47,140 firm-year observations over a period of sixteen years from 1990–2005. The findings suggest that export sales and domestic sales are interdependent and affect each other. R&D expenditure and business group affiliation positively affect export sales, however advertising expenditure negatively affects export sales.     

拓展新兴市场的新途径

经常听到出口企业抱怨一些海外大展对中国企业有限制．想去参展没有展位,即便能去．也拿不到好的展位。中国的展区有时被放到了一个不起眼的角落．有时干脆放到了分隔的展区,看到别的展厅人流如潮,而中国展区观众很少．只有一些走错了道的观众来到展台．肯定达不到参展效果。     

Devaluations and emerging stock market returns

Stock returns over the 2 years surrounding 24 currency devaluations are examined. Using bootstrapped distributions, returns preceding the devaluation are shown to be significantly below normal, in both dollar and local currency terms. Most of the downturn, however, occurs well before the month of the devaluation. Returns following a devaluation are normal. While industry and company specific effects appear to influence return behavior, only country effects and leverage levels are statistically significant. At the country level, both aggregate economic activity (GDP) and the size of the devaluation are important in explaining return behavior. The stock of foreign debt has little impact on returns. Finally, even though returns appear to anticipate devaluations, they are not statistically significant at predicting the size of the devaluation.     

Infant firms in emerging market: An analysis of stand-alones vs. subsidiaries

Newly established manufacturing firms in Korea without any corporate shareholder participation — stand-alones — exhibit significantly higher profitability and smaller asset size compared to those set up by corporate shareholders — subsidiaries. This pattern holds even for stand-alones and subsidiaries set up by the same controlling shareholder. Such differences in profitability do not seem to be driven by inherent differences in business risk nor reflected in post-establishment survival rates. Moreover, infant firms' overall profitability depends more on internal transactions with affiliated firms than external transactions.     

Shopping and cross-shopping practices in Hanoi Vietnam: An emerging urban market context

The process of supermarketization in emerging countries does not imply convergence in shopping practices. Based on a qualitative study in Hanoi, Vietnam, this paper adopts a shopping-as-practice approach with a specific focus on factors influencing practices. Seventy-night interviews were conducted in six urban districts of Hanoi. The results allowed to identify five types of shopping practices of differing natures and degrees of cross-shopping, and different strategies used to accomplish these practices, dominated by constraints or based on trust. The analysis showed the relationships between the factors and (1) shopping and cross-shopping strategies and (2) the dimensions of shopping practices. These findings deepen the current understanding of shopping and cross-shopping practices in the context of emerging markets. This paper also provides recommendations regarding retail policy and development in Vietnam.     

Stock market correlations between China and its emerging market neighbors

We examine interlinkages of stock return behavior for China and three emerging market neighbors from the Asia Pacific region from November 1993 to July 2008. Results are based on a VAR model. Impulse responses and vector decomposition of VAR are also utilized. Evidence suggests that the aggregate markets are mostly not interrelated. However, we observe relations between China and the other markets when foreign investor returns are specifically accounted for. In addition, a shock originating in China is significantly felt in the other equity markets. Stock market characteristics and macroeconomic conditions of these countries may help explain the observed relations.     

Acquisitions by emerging market multinationals: Implications for firm performance

This study develops and tests a framework about the resource- and context-specificity of prior experience in acquisitions. Although extant research has explained why multinational companies from emerging countries (EMNCs) acquire companies in developed countries, we have an incomplete and inconsistent understanding of the consequences of such acquisitions for the performance of target firms. First, we show that despite the concerns raised by politicians and the general public in developed countries, the acquisitions made by EMNCs often enhance the performance of target firms. Second, we examine whether the role of EMNCs' idiosyncratic resources (such as access to new markets and cheap production facilities) and investment experience in enhancing the performance of target firms differs across acquisition contexts. We demonstrate that not all types of resources and investment experience are equally beneficial and, in fact, some types of experience even have a negative effect on the performance of target firms. By contrast, other types of experience that EMNCs accumulate from prior investment enhance the performance of target firms by facilitating resource redeployment and the exploitation of complementarities.     

Sovereign credit ratings, emerging market risk and financial market volatility

This article presents event studies that find a significant effect on dollar bond yield spreads when rating agencies put emerging-market sovereign bonds on review with negative outlook. The finding has two conditional implications. If rating agencies can be turned from late into early warning signals, they would have the potential to dampen boom-bust cycles in emerging-market flows. If rating agencies cannot improve on their reactive approach witnessed in the run-up and aftermath of recent currency crises, regulation and guidelines stipulating a certain rating status for institutional investment will continue to intensify boom-bust cycles. The paper concludes with regulatory suggestions for both outcomes.     

The persistence of emerging market equity flows

The portfolio flows of institutional investors have been found to be highly persistent across countries and individual investment funds. This paper investigates the source of this persistence in emerging market equities. We employ the decomposition methodology in NBER Working Paper no. 9079 (July 2002), which decomposes the persistence of flows into four components: (i) own-country, own-fund persistence (which might arise from informed trading within each country by individual funds); (ii) own-country, cross-fund persistence (which might arise from asynchronicities across funds); (iii) cross-country, own-fund persistence (which might arise from asynchonicities within a fund) and (iv) cross-country, cross-fund persistence (which might arise from other reaction lags—such as contagion—across both countries and funds). We find evidence that all four components are positive in emerging markets. Our results differ from those in developed countries, in that we attribute approximately 10–20% of total persistence to cross-country effects (iii) and (iv). These findings are consistent with stories of contagion, which suggest that demand shifts move predictably from one country to another. They cannot easily be explained by informed trading alone or by wealth effects.     

Pro-market institutions and outward FDI of emerging market firms: An institutional arbitrage logic

We offer new theory and evidence regarding the effects of pro-market institutions on outward foreign direct investment (FDI) of emerging market firms (EMFs). Drawing on the logic of institutional arbitrage, we integrate the escapism and exploitation mechanisms of EMF internationalization into a unified theoretical context. We propose an inverted U-shaped relationship between host market-supporting institutions (MSI) and the investment scale of an EMF’s FDI project in the country, showing an escape-driven upward slope for low-to-medium MSI levels and an exploitation-driven downward slope for medium-to-high MSI levels. We supplement this main argument with two boundary conditions: the alleviating effect of home market liberalization (HML) and the strengthening effect of home government subsidies (HGS), demonstrating the coexistence and variation of pro- and anti- market institutions in an emerging market. Using information on 1,450 FDI projects conducted by 288 Chinese listed firms in 116 host countries, we obtain supportive evidence for the predicted relationships between the three institutional forces. This study enriches the literatures on institutional arbitrage and pro-market institutions with evidence from EMFs.     

Economic determinants of emerging stock market interdependence

There is a wealth of literature on how integrated stock markets are, but very few studies attempts to determine why stock markets are integrated. However, it is arguably even more important to understand the driving forces behind stock market relationships than to know whether they exist. Such an understanding will provide a better grasp of the functioning of the global stock markets and allow investors and policy-makers to ask additional questions such as: Would an increase in bilateral trade between two countries, for example due to a new trade agreement, change the interdependence of their stock markets? If the growth rate of a particular emerging market falls due to the current global economic downturn, will its stock market drag along all the other stock markets or can it be known beforehand which stock markets are more likely to follow? This study empirically estimates cross-section and time-series models to determine the fundamental factors that influence the correlation and evolvement of the correlation between emerging stock markets.     

The cross-section of emerging market stock returns

Using monthly stock returns from 28 emerging market countries and a total sample period of 21 years, we investigate the predictive power of a broad set of factors. We document that the factor definitions of the Fama and French (2015) five-factor model are less robust compared to alternative factor definitions. In contrast, the anomalous returns associated with cash flow-to-price, gross profitability, composite equity issuance, and momentum are pervasive as they show up in equal- and value-weighted portfolio sorts as well as in cross-sectional regressions. In contrast to financial theory and in line with previous findings, we do not find a positive cross-sectional relationship between risk and return. Finally, return forecasts derived from the alternative factor definitions are superior in their out-of-sample predictive ability to the ones derived from the five-factor model.