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Choosing a Country Classification for Developed and Emerging Markets

Article Quant Q&A · Author: Nguyen Lis
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Summary

The document addresses how to group countries as developed or emerging for a cross-country study of anti-corruption law adoption. It notes that there is no single official classification that all researchers must use. Instead, the choice of classification source should be made explicit and suited to the research question and period being studied.

The answer points to MSCI’s country market classification as a widely used, authoritative reference, while another response suggests using the MSCI Emerging Markets index. These suggestions are not equivalent: an index defines a particular investable universe, while a classification framework may also distinguish developed, emerging, and frontier markets. The discussion offers no comparison of competing frameworks or detailed guidance on historical country classifications, so researchers should check how memberships and labels changed over the study period and explain their choice.

Key ideas

  • There is no universally canonical division of countries into developed and emerging markets.
  • MSCI’s market classification is offered as a commonly used reference for country groupings.
  • An emerging-markets index provides a narrower, index-specific universe rather than a general classification rule.
  • Cross-country studies should document the classification source and consider whether country labels changed over time.

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# What is the source of classify the developed and emerging market worldwide?


# What is the source of classify the developed and emerging market worldwide?












I am doing a cross-country research where different countries implement anti-corruption at the different year. I want to examine the impact of the laws in each set of countries (developed and developing). The first country implement the law in 1993 and the last country implement the law in 2016.

I am wondering what index or source i need to use to classify the emerging and developed markets in this case. Many thanks and warm regards.

## Answer by Dimitri Vulis (score 0, accepted)

https://quant.stackexchange.com/a/68218

There is no official canonical classification of countries into developed / emerging / frontier markets.

However the MSCI one, found here https://www.msci.com/our-solutions/indexes/market-classification , https://www.msci.com/documents/1296102/1360895/8.5x11inch_MSCI_Country_Classification_Standard_FactSheet.pdf/5b95f2f4-4ced-43a2-92ad-218771a2218c , is pretty authoritative.

(For example, I remember when Australia and Greece were considered EM (rightfully so); they're only called DM because some people took offense at being called EM.)

## Answer by Si Chen (score 0)

https://quant.stackexchange.com/a/68217

How about the MSCI Emerging Markets index?

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.