Abstract
The Economic Freedom Index (EFI) is a measure of a country's institutional characteristics that promote economic activity, including the security of private property, openness to international trade, stability of the monetary system and lack of credit market manipulation. We use this index as a proxy for the degree of market segmentation and test the hypothesis that closed-end country fund premiums can be partially explained by a country's EFI value. Using panel data analysis, we find that EFI is significant in explaining observed variability in country fund premiums.
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