"During the last few decades, many emerging markets have lifted restrictions on cross-border financial transactions. The conventional view was that this would allow these countries to: (i) receive capital inflows from advanced countries that would finance higher investment and growth; (ii)...

This paper examines how international investors evaluate the change in the risk-return profile often Central and Eastern European countries that recently entered the European Union (EU). By supplementing international investment position data provided by IMF’s International Financial...