One of the perceived benefits of a flexible exchange rate system is the insulation of the domestic economy from foreign shocks, and the potential for independent policy actions. In view of the considerable uncertainty, which pervades appropriate specification of the relevant theoretical models,...

Over the past decades, there is an increased trend in the international financial integration as countries are removing and relaxing controls on cross-border investment. Capital can flow easily to the destination that offers higher returns as the results of decreasing obstacles to international...

In this paper, we investigate the relationship between liquidity and stock returns in the Vietnam stock market during the global financial crisis. Vietnam is one of a new group of frontier emerging markets referred to as CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa). We...

Despite the well documented gains from international diversification, investors continue to show a strong preference for investing in domestic assets, a phenomenon referred to in the literature as ‘home bias’. This bias comes at a price — a higher cost of capital for businesses. We...

Employing a panel data modelling technique, we contribute to two critical research issues: what is the link between Foreign Direct Investment (FDI) and economic growth and does the relationship change under different educational, institutional and economic conditions? Overall, the analysis...

The investor preference for home assets rather than a diversified portfolio of international assets termed 'home bias' remains a puzzle, given recent information and technology improvements, although presumed risk reduction benefits may have been reduced through improved financial market...

With the development of international financial market, the degree of international financial integration increased significantly during the late 1980s and 1990s. A key factor underlying this process was the increased globalization of investments seeking a higher rate of return and the...

This article presents a study of asset price volatility, correlation trends and market risk premia. Recent evidence shows an increase in firm-level volatility and a decline of the correlation among stock returns in the US (Campbell et al., 2001). We find that, in relation to the Euro-area stock...