Framework for Strengthening Valuation Processes for Public and Private Equity Investments in Frontier Economies
Abstract
Valuation processes play a pivotal role in guiding capital allocation decisions for both public and private equity investors, yet frontier economies often face structural inefficiencies that undermine valuation accuracy. Weak institutional frameworks, information asymmetry, low market liquidity, and limited adoption of advanced valuation methodologies contribute to persistent mispricing and heightened investment risks. This review paper develops a framework for strengthening valuation processes in frontier economies by integrating best practices from mature markets with context-specific adaptations. The paper examines challenges such as regulatory gaps, unreliable financial reporting, and volatility of macroeconomic indicators, while highlighting opportunities provided by technological innovations in financial analytics, enhanced corporate governance, and cross-border investment partnerships. Through an interdisciplinary approach, the study explores how advanced valuation techniques—such as discounted cash flow analysis, real options modeling, and machine learning-based predictive models—can be adapted to suit frontier market dynamics. Additionally, the framework emphasizes the importance of institutional capacity-building, robust disclosure standards, and alignment with global investment norms to attract sustainable capital inflows. By bridging the valuation credibility gap, this framework aims to strengthen investor confidence, foster capital market development, and enhance long-term financial stability in frontier economies.
How to Cite This Article
Aminat Opeyemi Shobande, Deborah Atere, Ibukunoluwa Hannah Toluwase (2020). Framework for Strengthening Valuation Processes for Public and Private Equity Investments in Frontier Economies . International Journal of Multidisciplinary Research and Growth Evaluation (IJMRGE), 1(3), 221-231. DOI: https://doi.org/10.54660/.IJMRGE.2020.1.3.221-231