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What makes emerging markets attractive for international business

What are emerging markets and why are they important?

  • Examples of advanced markets would be those of the U;
  • Why are they important?
  • The focus was on keeping a lid on the fallout from the crisis and sheltering Western economies from the storm;
  • The opposite is true of developed economies;
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This usually takes place as they become more industrialized and embrace free market economics. Examples of advanced markets would be those of the U.

Conversely, examples of emerging markets would be countries across the Asia-Pacific region and Latin America, such as Indonesia, Chile and Vietnam. They usually have lower levels of liquidity, less well established markets and lower levels of per-capita income.

Expert Answer

The opposite is true of developed economies. Why are they important?

These are the economies that will grow larger in the future and thus will have more and more of an impact on global trade and economics. For example, China was known as an emerging market many years ago before it started using a capitalist-style economy.

Crucially, emerging markets will help the global economy to grow.

What are emerging markets and why are they important?

A prime example is that India overtook the U. Why invest in emerging markets? Emerging markets are attractive because they tend to grow faster than their developed counterparts.

You can see this clearly when looking at how many of these markets have changed over the last decade. The focus was on keeping a lid on the fallout from the crisis and sheltering Western economies from the storm.

Since then, investors have looked elsewhere to reap the gains that Western markets used to offer and continue to do so. In contrast, developing economies can offer excitement and promise because they can offer growth. Investment can help corporate profits, which means stocks go up too.

  1. When a country is becoming more industrialized it will be spending vast sums on infrastructure and other aspects that can encourage large amounts of foreign investment, leading to rapid growth and expansion in liquidity and capital. These are the economies that will grow larger in the future and thus will have more and more of an impact on global trade and economics.
  2. In many of them, there is civil unrest and frequent strikes and coups, as well as higher rates of natural disasters.
  3. Investment can help corporate profits, which means stocks go up too. There can be barriers to entry for businesses who are used to dealing with more lenient and open systems of government, as well as vastly different cultures and customs which must be respected.

This can then lead to further investment which leads to more opportunities in a positive feedback loop. When a country is becoming more industrialized it will be spending vast sums on infrastructure and other aspects that can encourage large amounts of foreign investment, leading to rapid growth and expansion in liquidity and capital. Industrialization can also have a myriad of benefits in terms of increasing the labor force for industries like manufacturing, which then leads to greater numbers of exports.

Once again in the example of China, the move from an economy that was mostly based on agriculture to one became based on manufacturing changed the world as we know it today. For reasons like this, emerging markets can provide golden opportunities for investors who are looking for an economy on the up and up. What are the risks of investing in emerging markets?

A critical issue is political instability. There can be barriers to entry for businesses who are used to dealing with more lenient and open systems of government, as well as vastly different cultures and customs which must be respected. These factors can make it harder to conduct business.

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  • Why invest in emerging markets?
  • They usually have lower levels of liquidity, less well established markets and lower levels of per-capita income;
  • A critical issue is political instability;
  • There can be barriers to entry for businesses who are used to dealing with more lenient and open systems of government, as well as vastly different cultures and customs which must be respected;
  • There can be barriers to entry for businesses who are used to dealing with more lenient and open systems of government, as well as vastly different cultures and customs which must be respected.

Some emerging markets rely way too heavily on exporting their commodities to generate revenue see Brazil. In many of them, there is civil unrest and frequent strikes and coups, as well as higher rates of natural disasters. But for those with a taste for risk, emerging economies can provide great promise.

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