Assessing Emerging Markets through Transactional Dynamics: A New Multi-Dimensional Valuation Framework

Joshua Midha

No d8jkt, SocArXiv from Center for Open Science

Abstract: This paper introduces a novel transaction-function model for valuing emerging markets, integrating machine learning, agent-based modeling, and multi-method valuation techniques. Traditional valuation models often rely on aggregated economic indicators such as GDP growth and inflation, which lack the granularity needed to capture the transactional dynamics and unique risk factors inherent to emerging markets. In contrast, the proposed model treats each market as a multi-dimensional function of individual transactions, analyzing these interactions through a multi-method framework that includes Discounted Cash Flow (DCF), comparables, precedent transaction, and multiples analysis. By incorporating machine learning algorithms, the model iteratively improves predictive accuracy, dynamically adjusting to new data in volatile and data-sparse environments. Additionally, agent-based simulations provide insights into behavioral responses to policy changes, regulatory shifts, and other market-specific conditions, offering a behavioral layer often missing from traditional approaches. Validation of this model demonstrates a marked improvement in predictive accuracy and adaptability compared to conventional models. This transaction-function approach provides investors and policymakers with a granular, data-driven tool for assessing the true growth potential of emerging markets, paving the way for more informed, context-sensitive investment decisions.

Date: 2024-11-08
New Economics Papers: this item is included in nep-big
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:d8jkt

DOI: 10.31219/osf.io/d8jkt

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