Open AccessThe Role of Macroeconomic Factors in Explaining the Cost of Capital: Evidence from a Group of Emerging Economies
Author(s) -
Nicholas Apergis,
Sofia Eleftheriou
Publication year - 2012
Publication title -
asian journal of finance and accounting
Language(s) - English
Resource type - Journals
ISSN - 1946-052X
DOI - 10.5296/ajfa.v4i1.1694
Subject(s) - emerging markets , economics , capital (architecture) , bond , monetary economics , capital market , empirical evidence , cost of capital , empirical research , macroeconomics , microeconomics , finance , profit (economics) , philosophy , archaeology , epistemology , history
This study analyzes the dynamic relationship between the cost of capital and macroeconomic factors for a group of emerging markets spanning the period 1996-2009 and using the GMM estimator methodology, suggested in Arellano and Bond (1991). The empirical findings indicate that these macroeconomic factors play a significant role in explaining the cost of capital in the emerging markets.