The Growth Of Emerging Markets

Kvint (2008) indicates that some statistics of reports on emerging market are contradictory, and this inconsistent situation even can be seen from IMF’s reports. For instance, some emerging countries like China and India are classified as emerging markets and are included in the category of developing countries. On the other hand, many of the sub-Saharan countries as emerging markets are definitely still undeveloped. Kvint (2008) suggests that the main and most important characteristic of all emerging market countries is that they are at some stage during the processes of economic maturation and development of free markets. An attractive environment for foreign investors and global trading has been created based on this characteristic. He suggests the main characteristics in his study:

1. The international business environment is multi-dimensional, including economic, political, socio-cultural and technological influences. While each can be viewed in specific national settings, increasingly they have become interrelated through processes of globalisation. In particular, the role of transnational corporations has been a key to the deepening interrelationships across national borders. Yet, globalisation has not led to convergence. Considerable diversity between nations and regions continues to shape the

Over the year’s organizations from, all parts of the world have experienced growth in the areas of business. Much of this growth is in part due to multinational companies, many of them enjoying significant benefits. One such area is investment, however it creates benefits for foreign MNCs, and it brings about concern. Perhaps the greatest fear. Fear concerning state owned corporations and the lack of effectiveness of legislation / regulatory enforcement.

This report is intended to brief the reader on the effects of emerging economies on North America’s economy and the global market on a whole. This report provides an overview of the emerging economies of India & China; their education, ideological beliefs & economic performance and how North America’s way of business is affected. This report was compiled based on articles from reputable sources, such as Bloomberg and articles published within the industry. This report was authorized by Mr. Laviolette, an Accounting teacher at Jean Vanier Catholic High School.

The rapid economic growth trends demonstrated by China and India are currently at the height of debate amongst world leaders and economists. According to “Dancing with Giants: China, India, and the Global Economy”, edited by L. Alan Winters and Shadid Yusuf (2007), these countries are very unique in that their economic patterns of growth continue to increase and sustain momentum over an extended period of time while dealing with growing populations. The fact that these countries have illustrated a sustained pattern of growth means that they are beginning to, or have already shifted the balance of power within the global community; however, many scientists believe that this trend has shown negative side effects within the social and political settings because inequalities within both regions continue to rise. In Dancing with Giants: China, India, and the Global Economy (2007) the author states that, “Chinese and Indian authorities face important challenges in keeping their investment climate favorable, their inequalities levels at intervals that do not undermine growth, and their air and water quality at acceptable levels” (8). In a discussion, I will deconstruct the effects of China and India’s economic growth on social inequalities.

Over the years the global economy has seen a rise in so called ‘emerging markets’. These are developing economies which have exceeded economic performance in respect to their developing counterparts. These economies are newly industrialized and are on their way to becoming developed economies but have not yet reached that status. The more common and likely heard developing economies consists of BRIC (Brazil, Russia, India, and China) followed by Mexico, South Korea, Turkey, Saudi Arabia, and Indonesia. Developed nations (MEDC) include the westernised countries such as the U.S, the U.K and Japan. In 1999, Dr. Kvint published this definition: "Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions" This essay will locate the common characteristics that emerging markets share.

Emerging markets are growing faster than advanced economies due to increased human capital, better economic framework, and financial markets. Emerging markets companies are directly competing with developed-market firms and reshaping industries in the areas of technology, automobiles, business processing and consulting, and alternative energy. These developments will undoubtedly contribute to shifts in the global investment landscape over many years.

Emerging Markets is used to describe a country in the process of rapid growth and industrialisation

Some corporations have larger revenue than the gross domestic product of some countries. Walmart makes more revenue than Norway’s GDP: “Norway is the world’s 25th largest country with a GDP at $414.46 billion however still lower than Walmart’s revenue which is $421.89 billion” (Trivett, 2011). Developing countries work very hard to attract foreign investments because corporations reward thousands with jobs, benefit shareholders (rise share prices) and increase global well-being. If a corporation falls down, financial crisis and recession can begin. This power forces the government keep corporations alive and satisfied so they continue to provide jobs for local residents.

In 2013, emerging markets accounted for more than half of the world GFP based on purchasing power, per the International Monetary Fund (IMF). In 1990 they accounted for less than a third of a much smaller total. From 2003 to 2011 the share of world output provided by the emerging economies grew at more than a percentage point a year. The remarkably rapid growth the world has seen in these two decades marks the biggest economic transformation in modern history. It’s like will probably never be seen again.” (economist) “The most impressive growth was in four of the biggest emerging economies: Brazil, Russia, India and China, which Jim O’Neill of Goldman Sachs, an investment bank, acronymed into the BRICs in 2001. These economies have grown in different ways and for different reasons. But their size marked them out as special—on purchasing-power terms they were the only $1 trillion economies outside the OECD, a rich world club—and so did their growth

While faultfinders of globalization view the remote ventures of multinational enterprises as harming fares, employments, and wages at home and abroad, a thorough survey of research into the impacts of "outside direct speculation" credits multinationals with being much more useful

There are many factors involved when a company makes a strategic choice to enter into a new market. These factors include strategic market position, resource availability, human capital, as well as financial gains and efficiencies. For General Electric Healthcare (GEH), the strategy was clear: “...to revolutionize the world’s health by improving the quality, access and affordability of care.“ (GE Healthcare, n.d.) For GEH, the position that they needed was clear, to find a cost effective way to meet their goal. And their choice was to expand their operations into India and China. Specifically, according to Kumar (2012), India is on the brink of an innovation boom where many companies like GEH are establishing operations due to the influx of talented human capital.

The resilience and rapid-growth of East Asian economies even in the face of rising protectionism in their major export markets and a global recession, has intrigued developmental specialists who see Latin America as a prime candidate for comparison. By becoming increasingly libertarian and by embracing neo-liberalism Latin American countries have sought to emulate the success of East Asian economies. Nevertheless they have found it difficult to maintain their previous levels of growth, confronting piling external debts, high rates of inflation, shortages of investment capital, and the growing social and economic marginalisation of their population. Latin America’s industrialisation can be seen as a decedent of the East Asian model, however

The growth of the Asian Economy has had positive structural effects on the Australian Economy. The trade volumes are at record high levels with China and the appreciation of the exchange rates have provided a boost to the economy. There has also been a rise in the resource investment, which has seen a reallocation of factors of production, which has lead to employment growth in these sectors. The focus of the Asian economies is on the production and consumption of goods and the commodity intensive nature of this rise has led to an increase in commodity prices. This has led to an increase in the productive capacity, which supports the exports, employment, incomes, taxes and wealth of the Australian population. The strength of the resource sector has had a positive effects on the exchange rate which when combined with the stable inflation rate has led to a significant increase in wage dollar of the working population (Plumb, Kent, & Bishop, Implications for the Australian Economy of Strong Growth in Asia, 2013).

Emerging markets cover majority of world’s population and they are oriented toward consumers of more populated areas of the world like India, China & Middle Eastern countries United Arab Emirates, Russia and South American countries. Multinationals are getting benefits from these countries through there reverse innovations These reverse innovators are also experiencing a number of other positive developments in institutional reforms, infrastructure improvement, democracies, communication and information technologies and international business agreements (Khan, 2014).They also can introduce their reverse innovation in global & developed markets because multinational enterprisers have better idea of global markets and they can lift these innovations up. Sometimes reverse innovations are