The paper 'International Firms Doing Business in Emerging Markets" is a great example of business coursework. In this day and age, emerging and developing markets are serving as the drivers of world economic growth. This is a shift from previous years when the developed economies were almost the sole drivers of economic change. Emerging markets can be defined as those countries that have some characteristics of the developed markets, but cannot be categorized as developed markets. The emerging market is quickly hurtling towards the status of a developed market. But what is a developed market?
Developing markets are countries or regions that boast of highly industrialized economies and usually have large, well-organized service sectors. Developing countries tend to have quite a high GDP per capita income in comparison to emerging and developing economies (Kodolko, 2003, p. 13). Japan, United States, Australia, New Zealand, Britain, France, Sweden are good examples of developed countries. India, Singapore, Brazil Indonesia, China (excluding the regions of Macau and Hong Kong since they are developed), are examples of the emerging economies. However, a scrutiny of an economy such as China will reveal that it can indeed be seen as developing rather than emerging.
This is because despite being the country with the second-largest GDP, it also has the highest population in the world (Jain, 2006, p. 45). This translates to the fact that the average Chinese citizen’ s economic prosperity is a far cry from his/her counterpart in the United States or Australia. However, this argument can go both ways depending on what indicators are given priority. As such, India or China can be described as emerging or developing, considering the context and topic of discussion. Developing markets represent the opposite of developed markets and only come second to emerging markets.
Most African and Asian countries are developing. While they may be showing good promise of economic development in the future, they represent the lowest combined GDP’ s in the world and have poor infrastructure, low industrialization and underdeveloped structures of the economy (John, 2006, p. 25). The developing and emerging markets now claim the biggest share of global investments. Once only sought after for natural resources and cheap labor, these new markets are now reckoned as the new frontiers of business growth.
A growing bigger middle class, rapidly growing populations and sustained economic growth are some of the factors drawing many international companies towards these markets in new, interesting ways (Jain, 2006, p. 73). International Companies Business in Emerging/Developing Markets, Implications and Affecting Factors In an Economist newspaper article titled “ Submerging hopes” , the author writes about various negative implications befalling international firms in foreign lands. In the case of UniCredit, an Italian bank which recently bought one of the largest banks in Ukraine, the ‘ chickens are coming home to roost’ .
In the turmoil resulting from the talk of war by Russia, UniCredit has seen very limited withdrawals from automated teller machines across Ukraine. Additionally, international firms in Russia, such as Renault have reported tumbling share portfolios. This is a classic example of a negative political implication in doing business in emerging and developing countries (Submerging hopes, 2014, p. 1).
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