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- W639059429 abstract "The Efficient Markets Hypothesis (EMH) has been one of the most influential ideas in the past years and highlights that assets prices incorporate all information rationally and instantaneously. The last financial crisis has led to criticism of this hypothesis. Many practical observations concerning the reaction of investors, but also the mechanisms for the information encompassing in the price of stocks, come to highlight the aspects of 'market inefficiency'. Despite its simplicity, the EMH is surprisingly difficult to test and considerable care has to be exercised in empirical tests. It has attracted a considerable number of studies in empirical finance, particularly in determining the market efficiency of an emerging financial market. Empirical tests have given mixed results about efficiency in these markets. The major challenges to EMH are mainly in the following forms: empirical tests for EMH show no evidence in favour of EMH, the existence of the limitations of the statistical and mathematical models for EMH, the evidence of the excess volatility mean reversion predictability, the existence of bubbles, and non-linear complex dynamics and chaos in the stock market. Efficiency tests in emergent markets are rarely definitive in reaching a conclusion about the issue, because, for a test to be reliable, it should take into consideration the institutional features of these markets. To test the hypothesis of informational efficiency of an emergent market, one should take into account some peculiarities of these markets, like: nonlinearity of asset prices, thin trading, the financial liberalization impact on the performance of emerging markets. The paper proposes a critical analysis regarding the testing methods of the informational efficiency theory of the capital market and also proposes new perspectives that are meant to relax the strong EMH assumptions in emerging markets." @default.
- W639059429 created "2016-06-24" @default.
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- W639059429 date "2012-01-01" @default.
- W639059429 modified "2023-09-28" @default.
- W639059429 title "Testing the financial market informational efficiency in emerging states" @default.
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