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We examine how the international financial crisis of 2007–2010 has impacted on the performance of emerging market MNCs relative to their developed market counterparts. We present our multinational classification system and categorise the world's largest firms, the Global Fortune 500 (GF500), according to their degree of multinationality. We show that the number of GF500 firms from emerging markets has increased significantly over the past decade, and that the international financial crisis of 2007–2010 has further enhanced this trend. We compare the relative risk-adjusted performance of emerging and developed markets before and since the international financial crisis. We show that although the GF500 firms from developed markets tend to be more multinational than the GF500 firms from emerging markets, the latter have outperformed the former over the past decade – both before and after the recent international financial crisis.

The current work studies the cause, process, and effects of financial reform in 10 countries in Eastern Asia for the period of 1993–2002, especially focusing upon comparisons between pre- and post-Asia financial crisis. This study utilizes Mann–Whitney U test and Intervention Analysis to explore the different effects of the changes of GDP, stock index, exchange rate, CPI index, and the changes of the unemployment rate before and after the Asia financial crisis. It shows the consistent relationship between stock index, exchange rate, CPI index, and the changes of unemployment rate.

The aim of this study is to compare volatility persistence with daily volatility and to analyze the asymmetry effect of volatilities in stock markets of emerging economies. Using daily observations of stock market indices of selected major emerging countries during the period of January 1, 2002 to December 31, 2018, the authors estimate the persistence, the half-life measure of volatility and the daily volatility of the return series using the GARCH model application. The authors also examine the leverage effect on stock market returns using the EGARCH model estimation. In addition, the authors investigate the impact of the 2008 global financial crisis on various volatility measures and the leverage effect of emerging stock market returns. The authors then examine and compare the different speeds of mean reversion, volatility persistence and leverage effects in the national stock market indices during the pre-crisis, crisis, and post-crisis periods. The authors hereby present evidence that the effects of negative shocks are significantly larger than those of positive shocks in emerging stock markets throughout their different sample periods.

This chapter identifies three crisis warning indicators driven from trading in emerging markets’ carry trades, and empirically examines whether these indicators could predict two major financial crises that hit the global financial markets in the last decades — The 1997–1998 Asian crisis and the 2007–2008 global crisis. The probit regression is used to examine the power of the three indicators in forecasting financial crises, using data from eight Asian emerging countries which serve as proxies for emerging markets, independent of the origination of the crisis. I use both fixed effect and random effect estimation to measure crisis impacts. The empirical results show that financial crises could have been predicted. Probit estimation show that carry trade returns can predict a financial crisis, and the estimation results are robust to both panel level and country-level analysis. These three indicators are by no means an exhaustive list of all possible predictors of financial crisis. The literature suggests other fundamental indicators of financial crises such as the current account deficit and foreign debt. However, this chapter cannot fully consider these indicators for lack of data at this point in time. Although financial crisis may be better predicted by the well-known fundamental indicators, the contribution of this chapter is simply that carry trade-related indicators can help in predicting crises.

The ups and downs of the stock markets are consistently in the news. All things considered, there's no end to reporting the trajectory of volatility. Wide value changes in stock prices are a daily event in any stock market as speculators respond to monetary, business, and political situations. The main question is − did the Indian stock market develop a speculative bubble during the time of the US subprime crisis? Also, in terms of knowledge gained for an investor or a policy maker, we ask the following question: As to what extent are speculative bubbles predictable during a financial crisis? Knowledge gained by investors is also a part and parcel of an applied knowledge economy in a broader dimension.

In this chapter, the authors use a speculative bubble tracker, based on a Wiener stochastic process, to check for the existence of speculative bubbles during the 2008–2009 US subprime crisis. The data used in the study are daily SENSEX values (i.e., combination of stock prices of 30 well-established, most actively traded stocks of financially sound companies listed in the Bombay Stock Exchange) for the period between December 2007 and December 2009. Using such forms of daily data, the authors trace out the price movements using a Brownian motion equation and hence, try to correlate the stock price fluctuations with fluctuations in the crisis index (as put together by the authors) in the Indian context. Interestingly, for India, such a speculative bubble was prevalent during the time period considered pertaining to the 2008 US subprime crisis.

Summing up, the implication in terms of knowledge gained is particularly of interest for the portfolio managers who are engaged in devising diversification strategies for their portfolios.

Muslim investors must comply with the ethical injunctions prescribed for them while making financial investments. As per Islamic principles, the use of Riba (interest), Maysir (gambling) and Gharar (uncertain or contingent payoff contracts) is prohibited. This chapter provides some recent post great financial crisis evidence on the comparative performance of Islamic and conventional market indices. Islamic indices outperformed conventional market indices in terms of annualized returns except for emerging markets. In the overall period of 2007-16, it is found that Islamic indices have a lower coefficient of variation and hence higher reward to variability ratio. This suggests that Islamic indices are superior to conventional market indices adjusting for variability in returns. In most comparable Islamic and conventional indices, a strong co-movement and long-term co-integrating relationship is found. The results also highlighted causality running from conventional indices to the Islamic indices in most of the market groups, except for the S&P Global.

Rapid stock market growth without real economic back-up has led to the 2015 Chinese Stock Market Crash with thousands of stocks hitting the down limit simultaneously multiple times. The authors provide a detailed analysis of structural breaks in heavy-tailedness and asymmetry properties of returns in Chinese A-share markets due to the crash using recently proposed robust approaches to tail index inference. The empirical analysis points out to heavy-tailedness properties often implying possibly infinite second moments and also focuses on gain/loss asymmetry in the tails of daily returns on individual stocks. The authors further present an analysis of the main determinants of heavy-tailedness in Chinese financial markets. It points out to liquidity and company size as being the most important factors affecting the returns’ heavy-tailedness properties. At the same time, the authors do not observe statistically significant differences in tail indices of the returns on A-shares and the coefficients on factors affecting them in the pre-crisis and post-crisis periods.