The accelerating globalization of business and integration of financial markets are affecting the equity investment environment of emerging markets (EMS). For the study period, we do not observe statistically significant region or industry effects on the returns of the EMS country equity indexes. All measurements indicate a high degree of integration for EMS regions and broad industry categories. The relative size of region and industry effects and Pearson correlations, however, indicate the dominance of region effects over industry effects. In the EMS world, as a starting step, regional diversification will be more efficient than industrial diversification.
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