SURROGATE INVESTMENT STRATEGY: THE CASE OF SPAIN FOR LATIN AMERICA

Rajarshi Aroskar

The International Journal of Business and Finance Research, 2007, vol. 1, issue 2, 99-108

Abstract: This study analyzes a surrogate investment strategy by using a developed market as a possible candidate for investment in developing markets. It examines the markets of Spain and four Latin American countries: Argentina, Brazil, Mexico and Chile. Both short-run and long-run relationships are analyzed in this paper by using vector autoregression (VAR) and cointegration methodology respectively. It is found that Spain is affected by the Latin American countries in question, but does not affect them. Thus, it has exposure to these markets. This relationship is also maintained in the long run. Thus, Spain serves as an excellent surrogate for investment in Latin America.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:1:y:2007:i:2:p:99-108

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