Financial Risks and Their Influence on Investment Decisions: Insights from Emerging Markets

Abstract

A number of financial risks normally affect investment decisions in the emerging markets such as exchange rates risk, inflation risk, political risk and liquidity risks. As for the second aim, this paper focuses on how these risks influence investment behaviour and decision making. Employing a survey method with data from some emerging economies, this study establishes patterns of risks and actions taken by investors. The study gives a base of understanding risk adjusted return, portfolio management and the total character of investment in such risky areas.