This special symposium section of Emerging Market Finance & Trade contains eight selected papers that were presented at the first World Congress of Comparative Economics, June 15–17, 2015, Rome, Italy. All papers went through a rigorous anonymous reviewing process. The papers included here explore issues that are critical not only for policymakers, but also firms, investors, and other stakeholders.
The first five articles focus more on macro and international finance issues. In the first article, employing the fixed effect method on a panel of 220 emerging countries, Silvia Dal Bianco, Chiara Amini, and Marcello Signorelli assess the role of external factors (trade and capital openness) and internal factors (financial institutions and the quality of governance) in explaining the output loss in emerging economies during the 2008–2009 Great Recession. In the second article, which covers 28 transition economies over a period of 21 years, Christopher A. Hartwell investigates the role of financial liberalization in exposing economies to financial crises during transition and also examines, if a crisis did strike, whether liberalization does more harm than good. In the third article, Ian A. Glew investigates the potential for financial crises in smaller nations of the European Union and also employs the Minsky (1992) model of boom and bust cycles, which links past inflation to the potential for a subsequent reversal. The fourth article, written by Inbin Hwang, Deokjong Jeang, Hyungsoon Park, and Sunyoung Park, employs measures of drastic capital flow movements to classify net capital flows into four episodes and then analyzes the macroeconomic impact of each episode using a panel data of 24 advanced and 20 emerging economies. In the fifth article, Paulo Rogério Faustino Matos proposes a balanced panel approach to model the equilibrium level of credit to GDP ratio in Latin America, taking into account both the supply and demand side of the economy. As stressed by the author, the issue is relevant for emerging markets due to the crucial role of credit access in economic development.
The remaining articles cover micro issues at the firm or sector level. In the sixth article, Seungmin Chee, Soo Young Kwon, and Ju Hyun Pyun examine whether firms make investment decisions in anticipation of business cycle fluctuations, particularly during recessions, and test whether the firms subsequently perform better. The authors use a quarterly dataset of fixed asset investments for the U.S. firms during the period 1984–2012. The seventh article, written by Imran Riaz Malik and Attaullah Shah, addresses the concern regarding the regulations of futures markets and their potential of increasing market risk. Following stringent regulations of the single stock futures (SSFs) for resumption after financial crises, this study investigates the impact of SSFs on the underlying stocks in an emerging economy. In the final article, Baris Kocaarslan, Ramazan Sari, and Ugur Soytas evaluate two global finance center candidates, namely, Russia and Turkey. They evaluate both short- and long-run diversification benefits they might provide to global investors along with big four global finance centers, namely, the U.S., the U.K., Hong Kong, and Singapore. They also investigate both price and volatility spillover effects among the four global finance centers and Russia and Turkey, the two Eurasian candidates.
We thank all authors for their contributions to this symposium and the referees for their valuable service and time. We hope that the articles included here generate further research interest on emerging economies and markets.