Analysis of Risk Factors for Investors in Emerging Markets

Abstract

Risk management is becoming more and more dependent on the identification of risk variables for investors who wish to make investments in emerging economies. Finding risk factors for investors in emerging markets and identifying the top five risk factors in emerging markets were the two objectives of this study. To gather information from South African asset managers, this study used an online survey method, a quantitative research strategy, and online questionnaires. To analyse the data, descriptive statistics were employed. The findings indicated that the most crucial risk factors to consider when making investments in developing markets were currency, economic stability, liquidity, inflation, investment cost, hazards, and taxation. Additionally, it was shown that the top five risk factors in developing markets include inflation, currency fluctuations, hazards, liquidity, and economic stability. This study added to the body of knowledge and its significance and contribution to existing literature is that it gave investors in emerging markets fresh perspectives on risk factors to consider when investing in emerging market. The practical implication for investors is that they must consider factors identified in this study when investing in developing markets, it is advised that investors who choose to do so take into account the top five risk factors. Policymakers in emerging markets can help ensure that investors are well-informed about the risks associated with investing in emerging markets, ultimately fostering a more stable and attractive investment environment.

Keywords

• risk factors
• emerging markets
• investors
• investment