Emerging Market Capital Flows, 1998 Proceedings of a Conference held at the Stern School of Business, New York University on May 23–24, 1996 The New York University Salomon Center Series on Financial Markets and Institutions Series, Vol. 2

In a little over one decade, the spread of market-oriented policies has turned the once so-called lesser developed countries into emerging markets. Many forces have been responsible for the tremendous growth in emerging markets. Trends toward market-oriented policies that permit private ownership of economic activities, such as public utilities and telecommunications, are part of the explanation. Corporate restructuring, following the debt crisis of the early 1980's has permitted many emerging market companies to gain international competitiveness. And an essential condition, a basic sea-change in economic policy, has opened up many emerging markets to international investors.
This growth in emerging markets has been accompanied by volatility in individual markets, and a sector-wide shock after the meltdown in the Mexican Bolsa and Mexican peso, resulting in heated debate over the nature of these markets. Emerging market capital flows continue to be the subject of intense discussion around the world among investors, academics, and policymakers. Emerging Market Capital Flows examines the issues of emerging market capital flows from several distinct perspectives, addressing a number of related questions about emerging markets.

I The history of emerging markets: what have we learned?.- 1. Can debt crises be prevented?.- 2. Dealing with capital inflows: Mexico and Chile compared Andrés Velasco and Pablo Cabezas.- 3. International lending in the long run: motives and management.- Discussion: Philip Suttle.- Michael P. Dooley.- II. Returns on emerging market equities.- 4. Rethinking emerging market equities.- 5. The behavior of emerging market returns.- 6. Cross-listing, segmentation and foreign ownership restrictions.- Discussion: William N. Goetzmann and Philippe Jorion.- Stijn Claessens.- René Garcia.- Vihang R. Errunza.- III. Integration of emerging markets and international equity markets.- 7. Determinants of emerging market correlations.- 8. A Markov switching model of market integration.- 9. External financing in emerging markets: an analysis of market responses.- 10. Political risk in emerging and developed markets.- IV. Lending on ‘fixed’ terms in emerging markets: bank lending and sovereign debt.- 11. Cross-border emerging-market bank lending.- 12. Hedging the interest rate risk of Bradys: the case of Argentinian fixed and floating-rate bonds.- 13. Country and currency risk premia: evidence from the Mexican sovereign debt market 1993–1994.- 14. Emerging-market debt: practical portfolio considerations.- Discussion: Kenneth Rogoff.- Martin D. Evans.- Richard Cantor.- Lawrence Goodman.- V. Topics in corporate debt and emerging markets.- 15. Emerging-market corporate bonds — a scoring system.- 16. Proposal for a new bankruptcy procedure in emerging markets.- Discussion: Gordon M. Bodnar.- William J. Chambers.- Lemma W. Senbet.- List of contributors.

In a little over one decade, the spread of market-oriented policies has turned the once so-called lesser developed countries into emerging markets. Many forces have been responsible for the tremendous growth in emerging markets. Trends toward market-oriented policies that permit private ownership of economic activities, such as public utilities and telecommunications, are part of the explanation. Corporate restructuring, following the debt crisis of the early 1980's has permitted many emerging market companies to gain international competitiveness. And an essential condition, a basic sea-change in economic policy, has opened up many emerging markets to international investors. This growth in emerging markets has been accompanied by volatility in individual markets, and a sector-wide shock