The data point to several factors:
1. The single most important policy factor was the nature of their foreign exchange rate system. Countries with flexible foreign exchange rates set in a currency market did much better than countries whose exchange rates were pegged to another currency. Exchange rate flexibility buffered the impact of the economic shock created by the financial crisis.
2. The financial crisis hit countries "with more leveraged domestic financial systems and more rapid growth in lending to the private sector" harder than those with less leveraged domestic financial systems and less rapid growth in lending to the private sector. This factor was particularly important in "emerging markets."
3. In the case of a large set of "non-emerging market" developing countries, "countries exporting advanced manufacturing goods [were] more affected than those exporting food."
[F]or the emerging market countries, the main avenue of transmission of the shock appears to have been financial channels, particularly through rapid credit growth and high leverage, with the damage aggravated by pegged exchange rates. Leverage explains virtually all of the growth revision for the least affected countries in the sample, roughly two thirds of the revision for the average country, and slightly more than half of the revision for those countries most affected by the crisis. Credit growth explains a significant share of the growth revision for the average country as well as those most affected. None of the least affected countries in the sample had a pegged exchange rate, while limited exchange rate flexibility explains a significant share of the growth revision of the most affected countries.
The following countries were classified as "emerging markets":
Albania Croatia Lithuania Romania
Argentina Czech Republic Malaysia Russia
Azerbaijan, Rep. of Ecuador Mexico Saudi Arabia
Belarus Egypt Moldova Slovak Republic
Bolivia Estonia Nigeria Slovenia
Brazil Georgia Pakistan South Africa
Bulgaria Hungary Panama Thailand
Chile India Paraguay Turkey
China,P.R.: Mainland Indonesia Peru Ukraine
Colombia Kazakhstan Philippines Uruguay
Costa Rica Latvia Poland