The explanatory power of political risk in emerging markets

Bilson, Christopher M., Brailsford, Timothy J. and Hooper, Vincent C. (2002) The explanatory power of political risk in emerging markets. International Review of Financial Analysis, 11 1: 1-27. doi:10.1016/S1057-5219(01)00067-9

Author Bilson, Christopher M.
Brailsford, Timothy J.
Hooper, Vincent C.
Title The explanatory power of political risk in emerging markets
Journal name International Review of Financial Analysis   Check publisher's open access policy
ISSN 1057-5219
Publication date 2002-01-01
Sub-type Article (original research)
DOI 10.1016/S1057-5219(01)00067-9
Open Access Status
Volume 11
Issue 1
Start page 1
End page 27
Total pages 28
Place of publication Greenwich, Conn.
Publisher AI Press
Language eng
Subject 1502 Banking, Finance and Investment
Abstract There is substantial argument that political risk is an important and increasing influence on international portfolio allocation decisions. The purpose of this paper is to investigate the relation between political risk and stock returns within the context of emerging markets. The issue is examined using a framework that controls for global and local return influences. Consistent with the paper's predictions, the findings reveal that political risk is important in explaining return variation in individual emerging markets, particularly in the Pacific Basin, but not in developed markets. At an aggregate portfolio level, supportive evidence is found of a positive relation between political risk and ex-post returns in emerging markets that is robust to alternative risk measures, and more prevalent during the 1990s.
Keyword Emerging stock markets
Political risk
International asset pricing
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
UQ Business School Publications
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Created: Tue, 07 Apr 2009, 21:38:44 EST by Ms Sarada Rao on behalf of UQ Business School