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Essay Doctoral 2,009 words

Information quality and capital flow stability in global markets

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Essay 2,009 words

International Business

Identify the risks associated with global capital markets. Explain in detail, why you consider them risks. Are there solutions to mitigate those risks?

The risks of global capital markets center on the velocity, quality and latency of market information supporting cross-border capital flows of investments (Hill, 2011). Hill (2011) and others have argued that it is the alacrity vs. stability of capital flows that in large part determine how economically stable and growing a given region is over time (Hill, 2011) (Hasan, Kobeissi, Wang, 2011). In this dynamic of the accuracy, latency, reliability and quality of information flow across borders is found the stability or vulnerabilities of capital flows as well (Tong, Wei, 2011). These two dynamics form the foundation of the risk factors that impact global capital markets, leading to highly destabilized economic systems and performance, as is the case with Mexico for example (Hill, 2011). The risks of inaccurate, incomplete and often completely different information flows lead to short-term, temporary gains in international investment (Bracke, Schmitz, 2011). The lack of long-term investment in global capital market in turn leads to a lessening in the priority of investing in new information sources, further exacerbating these trends and lessening the willingness of investors to develop long-term capital market strategies in emerging nations (Hill, 2011).

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The risks of global capital markets as exemplified by limited investment in new information sources, coupled with a lack of long-term orientation, can only be…
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PaperDue. (2011). Information quality and capital flow stability in global markets. PaperDue. https://www.paperdue.com/essay/international-business-identify-the-risks-42804

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