Emerging equity markets in a globalizing world

Given the dramatic globalization over the past twenty years, does it make sense to segregate global equities into “developed” and “emerging” market buckets? Geert Bekaert (Columbia University) and Campbell R. Harvey (Duke University) argue in this paper that the answer is still yes. While correlations between developed and emerging markets have increased, the process of integration of these markets into world markets is incomplete. Interestingly, this incomplete integration along with the relatively small equity market capitalization creates potentially attractive investment opportunities. This has important policy implications for institutional and pension fund management.