Emerging Markets Quarterly (1997) 1:1 14-19.

The Making of an Emerging Market

Claude B. Erb
First Chicago Investment Management Co., Chicago, IL 60670

Campbell R. Harvey
Duke University, Durham, NC 27708
National Bureau of Economic Research, Cambridge, MA 02138

Tadas E. Viskanta
First Chicago Investment Management Co., Chicago, IL 60670

Abstract

Do the traditional arguments for emerging markets investment hold today? That is, do merging countries provide higher expected returns? Is a portfolio of emerging markets still a good portfolio diversifier? The authors say yes, with some cavaets. In an article which revisits what constitutes and merging market, the dynamaism and the diversity of emerging markets, beyond the World Bank's traditional definition of per capita GDP, and the overlaps of emerging markets with developed markets may become clearer.