TESTING WEAK-FORM EFFICIENCY OF EMERGING ECONOMIES: A CRITICAL REVIEW OF LITERATURE

Due to the globalisation and mobilisation of capital markets, the concept of EMH is gaining a lot of importance in both developed and emerging economies. Most of the researches on the weak-form efficiency to date were based on the developed countries. The present study will seek to provide a comprehensive understanding of the weak-form efficiency in emerging economies. In terms of practical implications, the paper has direct implications for future research in EMH in particular emerging economies. The paper contributes in manly three ways: First, the paper collates and examines the broader and most effervescent literature and their findings. Second, it also presents a comprehensive, encompassing research work and a holistic view of various aspects of weak-form EMH. Finally, no studies have been conducted to date on a literature review of EMH weak-form efficiency in emerging economies. Nevertheless, the limitation of the study is that the findings are presented that may not be generalized to developed nations, which may be quite different in socio-cultural and political settings including the behavioral aspects of investors and the strength of the capital market.


Introduction
The concept of EMH came from Fama (1970Fama ( , 1991  cause of the globalization, free movement of investments across national boundaries

Random walk model
changes must be a response only to new information. As the information arrives raninvestors cannot predict the insights of the future prices based on the past information and cannot earn abnormal returns.
-ent with equity being appropriately priced at an equilibrium level, whereas the absence important implications for the allocation of capital development of overall economy.
where P t +1 = Price of share at time t +1; n = Expected price change; P t = Price of share at time t; t +1 and pointed out that this model is more powerful than the fair game model. However, Jensen (1978) found that anomalous price behaviour where certain series appeared to follow predictable paths. In later study, Fama (1998) suggests that new behavioural based theories are required because of the apparent anomalies. The most of the previous et al. 2001;Smith, Ryoo 2002;Fama, French 1988;Osborne 1959;Cootner 1962Cootner , 1964Fama 1965;Fama, Blume 1966;Dimson, Mussavian 1998;Cowles, Jones 1937;Poterba, Summers 1988;Fama et al. 1969Fama et al. , 1993Fama 1995;Groenewold et al. 1993). Hence, the present study On the contrary, the economic theory suggests a number of sources of nonlinearity in able for small deviations from the fundamental equilibrium. Subsequent reversion to the the dynamic behaviour of returns will differ according to the size of the deviation from equilibrium, irrespective of the sign of disequilibrium, giving rise to asymmetric dynam--1998) also may lead to persistent deviations from the fundamental equilibrium. On the other hand, heterogeneity in investors' objectives arising from varying investment hori-

Critical review of literature
other hand, the second ones argue that the EMH theory is contradictory because of the states that the current returns are considered to contain all information that is incorporated in historic data and the future returns cannot be forecasted from past returns data. Fama (1991) has extended the predictability power of past returns including the seasonal arguments surrounding three categories to simplify the research objectives:

Empirical evidence of developed markets
examined the 19 indices of British industrial share prices and commodity prices in - (1934). However, the studies did not provide the economic rationale for the hypothesis where T that the transaction varies on individual securities because of the investors' decisions, so based on the fair game model. Alexander (1961) was somewhat supportive to the conclusion of Osborne (1959Osborne ( , 1962 and stated that it would be well on speculating prices daily data on price indices from 1897 to 1959 and found the evidence against random the analysts or the specialists hold important information which are monopoly in nature sample period. On the other hand, Fama and French (1988) found that negative serial correlation for longer period and the 25% and 40% of the variation of longer-period return was predictable from the past returns. Poterba and Summers (1986) also concluded the infrequent trading or time varying volatilities.
On the other hand, Lee (1992) investigated the US and ten other industrialized countries, namely Australia, Belgium, Canada, France, Italy, Japan, Netherlands, Switzer- With regard to Groenewold (1997) and Lee and Mathur (1999) conclusions, Worthing--ber 1987 to May 2003 using serial correlation, runs, unit root and multiple variance ratio tests. They used the daily returns of share indices in US$. The evidence showed Netherlands. The different test provided the mix result which was inconclusive in nature and they did not comment on that.
Gan et al.