Rose (2007) examines the exchange ratevolatility for 45 IT and non-IT countries, and finds that exchange rate volatility is typically lower for IT countries compared with non-IT countries. Some argue that volatility is more severe in developing countries compared with developed economies (e.g. Aghion et al., 2009) because of the prevalent rising agency and contract enforcement costs. Some claim that IT in EMEs has not been as successful as in developed economies because of the challenges associated with weaker fiscal and monetary institutions, limited credibility, and larger potential external shocks (e.g. Fraga et al., 2003).