A path to mature market: logistic regression approach to delineate between emerging, transition and developed markets

Whereas conceptual guidelines exist to identify where along a continuum of market emergence a country may fall, researchers need a quantitative tool with which they can better delineate countries into the existing groupings. This study incorporates economic theory and the World Bank view to extract the defining factors (financial liberalisation, trade liberalisation, privatisation and entrepreneurship) of market emergence. An empirical logistic regression is then constructed to determine which factors play the most significant role in delineating countries into the emerging, transitional and developed markets. The model refines existing knowledge of the significance of the defining factors in delineating between the country groupings studied, and provides a clear instrument with which to better understand a country's path to the global market emergence. Our study results indicate that emerging markets are strongly (statistically significant) defined by financial liberalisation, while trade liberalisation is similarly related to transitional markets, and developed markets are significantly determined by financial liberalisation and degree of entrepreneurship.