​Financial Misconduct in Emerging Markets: Institutions, Market Consequences, and Regulatory Responses

Closes:
Journal
International Journal of Emerging Markets
Guest editor(s)
Professor David Y. Aharon, Professor Menachem (Meni) Abudy,

Introduction 

Financial misconduct is one of the most significant threats to the integrity and development of capital markets (Karpoff, Lee & Martin, 2008; Dyck, Morse & Zingales, 2010). Episodes of fraud, earnings manipulation, insider trading, corruption, and market manipulation undermine investor confidence, distort price discovery, and increase the cost of capital (Karpoff, Lee & Martin 2008; Povel, Singh & Winton, 2007). While these issues have been extensively studied in developed markets, much less is known about their drivers and consequences in emerging market environments.

Emerging markets, therefore, offer a unique laboratory for examining how institutional environments shape incentives for misconduct, detection mechanisms, and market consequences (Dyck, Morse & Zingales, 2010; Fang, Huang & Karpoff, 2016). For example, weaker enforcement may increase the prevalence of misconduct but also alter the role of external monitors such as institutional investors, analysts, media coverage, and international capital flows. Similarly, state ownership, political connections, and family control may interact with governance mechanisms in ways that affect both the likelihood and the consequences of misconduct.

In addition, recent developments in financial technology, digital platforms, and crypto-assets have created new channels for financial misconduct, particularly in jurisdictions where regulatory frameworks are still evolving. These developments raise important questions about regulatory capacity, investor protection, and the resilience of emerging capital markets.

References

Aharon, D. Y., Baig, A. S., & Delisle, R. J. (2025). The effects of country governance quality on the stability of equity markets. International Review of Finance, 25(3), e70033.

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Bailey, M., Glaeser, S., Omartian, J., & Raghunandan, A. (2025). Misreporting of mandatory ESG disclosures. Management Science.

Dyck, A., Morse, A., & Zingales, L. (2010). Who blows the whistle on corporate fraud?
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Fang, V. W., Huang, A. H., & Karpoff, J. M. (2016). Short selling and earnings management: A controlled experiment. Journal of Finance, 71, 1251–1294.

Karpoff, J. M., Lee, D. S., & Martin, G. S. (2008). The cost to firms of cooking the books.
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Karpoff, J. M. (2012). Detecting and deterring financial misconduct. Review of Financial Studies, 25, 2787–2797.

Khuc, A. T., Nguyen, P. T. H., Nguyen, M. C., & Le, H. T. (2025). Perceived risks of financial misconduct and fintech in crowdfunding of Vietnamese individual investors. Emerging Markets Review, 64, 101229.

Liu, X. (2016). Corruption culture and corporate misconduct. Journal of Financial Economics, 122, 307–327. 

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Niu, G., Yu, L., Fan, G., & Zhang, D. (2019). Corporate fraud, risk avoidance, and housing investment in China. Emerging Markets Review, 39, 18–33. 

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Povel, P., Singh, R., & Winton, A. (2007). Booms, busts, and fraud. Review of Financial Studies, 20, 1219–1254.

 

List of Topic Areas

We welcome theoretical, empirical, and policy-oriented contributions addressing (but not limited to):

  • Insider trading and market manipulation
  • Corruption and political connections
  • ESG, sustainability, and corporate misconduct
  • Financial misconduct in fintech and digital finance
  • Crypto-related fraud in emerging economies
  • Enforcement quality and regulatory capacity
  • Investor protection and misconduct
  • Role of institutional investors in curbing misconduct
  • Media, transparency, and misconduct detection
  • Cultural and informal institutions
  • Consequences for foreign direct investment and capital flows
  • Crowdfunding and financial market misconduct
  • Accounting fraud

 

Submissions Information

Submissions are made using ScholarOne Manuscripts. Registration and access are available at: https://mc.manuscriptcentral.com/ijoem

Author guidelines must be strictly followed. Please see: https://www.emeraldgrouppublishing.com/journal/ijoem

Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to “Please select the issue you are submitting to”. 

Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.

 

Key Deadlines

Opening date for manuscripts submissions: 01/08/2026

Closing date for manuscripts submission: 01/01/2027