Examples of successful transition from frontier to emerging stock market,
Fries, S., & Taci, A. (2005). Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries. Journal of Banking & Finance, 29(1), 55-81.
Is the transition driven primarily by changes in the underlying economy, or by regulatory and other changes in the stock market such as an increase in foreign share ownership for example?
Frontier (Vs. Emerging or Developed) is originally a S&P/IFC denomination; it is established using the ratio of a country's GDP relative to the US---i.e., the bottom tier is called Frontier. Others like MSCI or FTSE have other criterias and a different listing. I have no example in mind of a transition from the frontier tier to the emerging one. However few emerging tier markets such as South Korea, Greece and Portugal made it into the first tier--developed in 2001. Actually, I believe Greece made it back into the emerging tier after their fiscal crisis.
Thanks. it would be useful to look at the three examples you mentioned to gain further insight.
I found this about the DOW classification, it might interest you: https://www.djindexes.com/mdsidx/downloads/brochure_info/Dow_Jones_Indexes_Country_Classification_System.pdf
Dear Colleagues, I agree with your opinions and would like to add some additional approaches regarding the discussed major question. I would suggest in the line of major factors that influence stock market transition from frontier to emerging market and consider particularly the following factors:
. GDP per capita, business competition environment, level/indicators of economic transparency and legality, unemployment indicators, etc.;
.stock market capitalization and capitalization/GDP ratio;
.stock market turnover, liquidity, stability, transparency, praising;
. level of institutional and infrastructural development, sophistication and risks;
.IPO, DFI indicators, etc.
Dear Carl Robinson
Greetings,
There are many factors may be effect of stock market transition such as economic factors ( GDP , Exchange rate , inflation , unemployment rate .....) and financial factors ( size , debt , liquid , profitability ......) . I think these factors need to test statistical tools and show the results.
Best Regards
https://www.researchgate.net/publication/285590240_Sensitivity_Analysis_of_Macroeconomic_Variables_and_Stock_Returns_A_Cross-Country_Comparison_between_Bangladesh_and_India
Book Sensitivity Analysis of Macroeconomic Variables and Stock Re...
Foreign direct investment (FDI), Infrastructural development, savings, trade openness, etc.