Information Asymmetry in Emerging Markets: How Can a Government (Like India’s) Test for Tunneling in the Economy?

Abstract

Information asymmetry makes accurate valuation of assets and companies challenging in emerging markets. Tunneling and other transfer mechanisms complicate things further. Governments can employ taxation to help identify and even discourage tunneling and eventually help investors in evaluating assets and firms confidently.

TOPICS: Private equity, legal/regulatory/public policy, emerging, fundamental equity analysis