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Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. Abstract: Developing countries market participants most often have relied on futures trading at international exchanges in developed countries to hedge out price risks rising in local markets. Nonetheless, in recent years of futures markets development, a few developing ... read morecountries succeeded in launching a local exchange and contract competing against the highly liquid international exchanges. This paper addresses the success in these developing countries and provides a through analysis of what may have been important in generating such notable outcomes. A number of hypotheses have been tested in a qualitative sense and i) presence of large physical markets, ii) a contract that is substantially different from existing contracts or with a large basis risk, iii) development of financial intermediaries and iv) development of institutional arrangement including financial markets, regulations were largely factors of success followed by presence of committed market actors, low level of industry integration and export orientation of underlying products.read less
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