Principles behind investors’ consideration of investing in emerging markets

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Investors are showing a growing interest in emerging economies due to several compelling characteristics that make these countries attractive for investment. The objective of this study is to examine the factors that motivate individuals to invest in emerging markets. This study employed a quantitative research methodology, specifically utilizing a survey method and online questionnaires to collect data from asset managers in South Africa due to their investment expertise. This group is specifically for a limited number of investors and/or asset managers who have the ability to provide the required information. Data analysis entailed the application of descriptive statistics. The findings revealed multiple justifications for investing in emerging economies, such as higher returns, risk diversification, capitalizing on emerging markets, expanding prospects, maintaining a well-balanced investment portfolio, hedging money, and ensuring anonymity. Among these arguments, only four are crucial when contemplating investment in emerging economies: augmented returns, risk diversification, capitalizing on emerging markets, and expanding prospects.

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    • Figure 1. Reasons for making investments in emerging markets
    • Table 1. Descriptive statistics and internal consistency reliabilities
    • Conceptualization
      Jethro Godi
    • Formal Analysis
      Jethro Godi
    • Methodology
      Jethro Godi
    • Writing – original draft
      Jethro Godi
    • Writing – review & editing
      Jethro Godi