Emerging markets show increased integration with global economy, impacting investment risks.
The article explores the benefits of investing in emerging markets and tests if the existing asset-pricing model can explain returns in these markets. The researchers used a model that considers changing economic factors and found that some markets are more integrated with the world market now compared to the 1980s, while others remain more isolated. They focused on regions like Latin America, Africa, the Middle East, East Europe, and Asia, revealing differences in market behavior across these areas.