Strategic Options for MNEs Operating in Emerging Markets

2016 ◽  
pp. 34-49
Author(s):  
Andreas M. Hartmann
Keyword(s):  
Emerging Markets ◽  
Natural Resources ◽  
Emerging Economies ◽  
Skilled Labor ◽  
Foreign Investors ◽  
Doing Business ◽  
Pros And Cons ◽  
Strategic Options ◽  
Local Company

This chapter outlines some of the basic opportunities, conditions, and strategic options for firms operating in emerging markets. Increasing FDI figures show that emerging markets offer many opportunities for foreign investors, but also pose specific challenges for doing business. Some factors are more abundant and less expensive, especially low to medium-skilled labor and natural resources, while sophisticated services are more difficult to obtain. A specific characteristic of emerging markets is the lack of business-enabling intermediaries. Therefore, foreign MNEs frequently need to fulfill tasks that are not within their range of activities in their home countries. Additionally, many governments in emerging economies act slowly and erratically; and laws are often not enforced systematically. In this context, foreign MNEs can choose between acquiring a local company, partnering up, or going it alone. The chapter looks at the pros and cons of these modes of internationalization and presents some concluding comments on the flexibility required by working under such conditions.

Do Stock Markets Comove in Emerging Economies?

2017 ◽  
pp. 197-213
Author(s):  
Sadullah Çelik ◽  
Emel Baydan
Keyword(s):  
South Africa ◽  
Emerging Markets ◽  
Financial Markets ◽  
Emerging Economies ◽  
Stock Markets ◽  
High Concentration ◽  
Foreign Investors ◽  
Market Participants ◽  
Emerging Stock Markets ◽  
Unconventional Methods

Great Recession has brought the need to model and assess the financial markets with unconventional approaches. The nature of consumer behavior in financial markets has become crucial as real and financial sector comoving overtime was a dream of no rationality. The union of consumers looking for higher wealth and speculative stock market participants was not a sustainable case. But, what happened to the consumers/investors in emerging economies? This chapter assesses the behavior of emerging stock markets during the turmoil using weekly data for Brazil, China, India, Indonesia, Russia, South Africa and Turkey with US as the benchmark for January 2003–March 2014. Two unconventional methods are used for checking asymmetric contagion; the wavelet comovement and frequency domain causality. The findings show that markets with rather high concentration of foreign investors are highly affected but consumers were not due to smaller participation. The asymmetric contagion argument is verified for some emerging markets as consumers/investors suffered as much as any other market participant.

scholarly journals Doing Business in Emerging Market Economies: Challenges and Success Strategies for Western Multinational Corporations

2021 ◽  
Vol 14 (9) ◽  
pp. 82
Author(s):  
Ashford C. Chea
Keyword(s):  
Emerging Markets ◽  
Multinational Corporations ◽  
Emerging Economies ◽  
Business Strategy ◽  
Global Economy ◽  
Negative Impact ◽  
Emerging Market ◽  
Strategy Development ◽  
Doing Business ◽  
Institutional Challenges

The purpose of this paper was to investigate and analyze the negative impact of emerging economies’ institutional challenges on western multinational corporations (MNCs) operating there. The content analysis methodology was used. The paper reveals that emerging markets’ institutional voids affect western MNCs in terms of cost of doing business, strategy development and overall competitiveness. The conclusions derived from the analysis is that despite emerging economies investment opportunities, rapid economic and demand growth, their competitive landscape can negatively impact western MNCs ability to succeed in these markets. This is due to imprudent policies and inadequate governance structures implemented by emerging market policymakers. The article begins with a brief introductory background of emerging economies. This is followed by objectives of the paper, research method, and the theoretical underpinnings for the motivations of western MNCs to pursue overseas markets in emerging economies. It then provides an analysis of the role and significance of emerging economies in the global economy. This is followed by a critical review of MNCs strategies in emerging markets, and effects of emerging market institutional challenges on MNCs. Then, the implications for MNCs competitiveness in emerging markets are examined. Finally, recommendations for success for both prospective and current MNCs doing business in emerging economies are explored.

Tiny Sips and Walmart—A Dream or a Curse?

2021 ◽  
pp. 251512742199252
Author(s):  
Robert A. Boyle ◽  
Jerome A. Katz ◽  
Patricia G. Bagsby
Keyword(s):  
United States ◽  
New Product ◽  
The United States ◽  
Spring Water ◽  
Doing Business ◽  
The World ◽  
Pros And Cons ◽  
Business Acumen

For entrepreneurs, being offered a distribution deal by Walmart seems like a dream come true. After all, what better way to have a new product quickly appear in thousands of stores all around the United States or maybe even all around the world? This dream became a reality for Marty, the creator of Tiny Sips—a simple, wholesome children’s beverage made from Montana spring water and all-natural ingredients. As the details and conditions related to the distribution deal became apparent, however, Marty soon understood that doing business at that level requires sophisticated entrepreneurial savvy and a great deal of capital. The joy of possibly selling Tiny Sips everywhere suddenly became eclipsed by questions about how to raise enough cash to scale quickly while simultaneously minimizing risk. Marty needed to employ the business acumen necessary to slow down, consider the pros and cons, and make the best decision for his company. The educational focus of this case involves weighing the entrepreneurial risks and rewards of pursuing a deal with a large retailer like Walmart. While this type of opportunity may seem exciting at first glance, a variety of factors must be considered in order to find a thoughtful and sensible path forward.

scholarly journals Terrorism as a Determinant of Attracting FDI in Tourism: Panel Analysis

2018 ◽  
Vol 10 (12) ◽  
pp. 4553 ◽  
Author(s):  
Maja Nikšić Radić
Keyword(s):  
Dynamic Panel Data ◽  
Panel Data Models ◽  
Dynamic Panel ◽  
Foreign Investors ◽  
Research Results ◽  
Doing Business ◽  
International Tourist ◽  
Previous Level ◽  
Business Conditions ◽  
Macroeconomic Environment

The aim of this paper is to investigate whether terrorism is one of the important determinants affecting the investment decisions of foreign investors in tourism on a panel of 50 countries over the period 2000 to 2016. In addition to terrorism, the importance of three other theoretically significant determinants of attracting foreign direct investment (FDI) in tourism are explored—the previous level of FDI in tourism, the level of GDP and the international tourist arrivals. To obtain more reliable research results, the initial model is extended with certain control variables. The study uses system-GMM estimator for dynamic panel data models. The research results of a narrower and a wider model indicate that terrorism has no significant effect on the FDI inflow in tourism while international tourist arrivals significantly affect the future FDI in tourism in both models. Furthermore, the research results entail certain political connotations. In order to attract foreign investors in tourism, the most important factor is to ensure a stable macroeconomic environment with a competitive position in the Doing Business list and what better business conditions. Attention should also be focused on the security and preventive counter-terrorism, which will ensure that potential destinations reflect confidence, have a growth rate of tourist arrivals and, consequently, attract foreign investors.

scholarly journals Afghanistan’s Business Environment: Huge Potential for Investment in an Uncertain Place

2019 ◽  
Vol 1 (8) ◽  
pp. 19-23
Author(s):  
Abdul Kabir Karimi
Keyword(s):  
International Institutions ◽  
International Aid ◽  
Business Environment ◽  
Political Uncertainty ◽  
Foreign Investors ◽  
Critical Situation ◽  
Doing Business ◽  
Article Analysis ◽  
The Government ◽  
High Level

The article aims to present Afghanistan’s business environment and elaborates on the huge potential for investment in an uncertain place. A number of literatures has been reviewed from different international and government-related institutions and also quoted government high-level officials to identify these potentials and uncertainties. The review of the studies and research by international institutions suggests that the government of Afghanistan is actively working to prepare a business-friendly environment for domestic and foreign investors. However, political instability, lack of electricity, crime, theft and disorder, access to land and corruption still remains as the major constraints of doing business in Afghanistan. It is a fact that reviving Afghanistan’s business environment in this critical situation of conflict, declining international aid, and ongoing political chaos can be extremely difficult. However, reviving its business environment and utilizing the opportunities cannot wait for the end of the ongoing conflict and current political uncertainty. What Afghanistan needs to do is think creatively to recognize what can be done in the time of conflict and political uncertainty to take advantage from those opportunities. Although the extension of the article analysis requires more evidence to judge, the analysis challenges the general understanding of the business environment and points to important new avenues of research.

scholarly journals Towards the Uberisation of Legal Practice

2019 ◽  
pp. 46-63 ◽  
Author(s):  
Margaret Thornton
Keyword(s):  
Direct Access ◽  
Law Firms ◽  
Legal Practice ◽  
New Ways Of Working ◽  
Doing Business ◽  
Gig Economy ◽  
Recent Graduates ◽  
Pros And Cons ◽  
Permanent Staff

Uber and Airbnb signify new ways of working and doing business by facilitating direct access to providers through new digitalised platforms. The gig economy is also beginning to percolate into legal practice through what is colloquially known as NewLaw. Eschewing plush offices, permanent staff and the rigidity of time billing, NewLaw offers cheaper services to clients in order to compete more effectively with traditional law firms. For individual lawyers, autonomy, flexibility, a balanced life, wellbeing and even happiness are claimed to be the benefits. The downside appears to be that NewLaw favours senior and experienced lawyers while disproportionately impacting  on recent graduates. This article draws on interviews with lawyers in Australian and English NewLaw firms in order to evaluate the pros and cons of NewLaw.

scholarly journals Remittances and exchange rate - Empirical evidence from emerging economies

2016 ◽  
Vol 19 (1) ◽  
pp. 39-51
Author(s):  
Canh Phuc Nguyen
Keyword(s):  
Exchange Rate ◽  
Panel Data ◽  
Emerging Markets ◽  
Interest Rates ◽  
Emerging Economies ◽  
Global Financial Crisis ◽  
Balance Of Payments ◽  
The Exchange Rate ◽  
Remittance Flows ◽  
Macroeconomic Risks

The exchange rate plays an important role to trade, investment and macroeconomic risks of open economies. There are many factors that affect the exchange rate such as inflation, interest rates, balance of payments where remittance flows receive more and more attention of economists due to their increase in their values, particularly in emerging economies. This study uses data from 21 countries which are classified as emerging markets in the period between 2001 and 2013 to investigate the impacts of remittances on exchange rate. Through panel data estimations, we found that remittances increase the value of the local currencies, which is not altered by the 2008 global financial crisis.

Reducing Corruption and Protecting Privacy in Emerging Economies

2014 ◽  
pp. 237-249 ◽  
Author(s):  
Jonathan Bishop
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Tax Evasion ◽  
Public Safety ◽  
Affective Computing ◽  
Computing System ◽  
Location Based Services ◽  
Fair Share ◽  
Social Proof

This chapter presents a location-based affective computing system, which can assist growing emerging markets by helping them reduce crime and increase public safety when used in conjunction with CCTV. Internet systems based on location-based services have increased in availability. Social platforms such as Twitter and Facebook now employ the information on user locations to provide context to their posts, and services such as Foursquare rely on people checking into different places, often to compete with their friends and others. Location-based information, when combined with other records, such as CCTV, promotes the opportunity for a better society. People normally abused by corrupt state officials for crimes they did not commit will now have alibis, shops will be able to more effectively build trust and procure new customers through “social proof,” and other forms of corruption will be tackled such as benefit fraud and tax evasion. Trust that everyone is paying his or her fair share can develop.

Doing Business and Imperfections in the Development of Knowledge Economy in the Arab Countries

2014 ◽  
pp. 335-363
Author(s):  
Ahmed Driouchi
Keyword(s):  
Knowledge Economy ◽  
Arab Countries ◽  
Skilled Labor ◽  
Social Policies ◽  
High Unemployment ◽  
Doing Business ◽  
Almost All ◽  
Enterprise Creation

As underlined in the previous chapter, rents may reduce the capacity of Arab economies to accelerate its adoption of knowledge economy. Major imperfections in these economies at the levels of markets, governance, and enterprises are discussed in this chapter. The limited business and enterprise creation in relation to the high unemployment of skilled labor are among the issues analyzed and discussed. As the prevailing political, macroeconomic, and business components are inter-related, imperfections are identified in almost all areas of the Arab economies. The chapter shows clearly that shifts to further knowledge economic and social policies are needed.

Reducing Corruption and Protecting Privacy in Emerging Economies

Gamification ◽  
2015 ◽  
pp. 2113-2125
Author(s):  
Jonathan Bishop
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Tax Evasion ◽  
Public Safety ◽  
Affective Computing ◽  
Computing System ◽  
Location Based Services ◽  
Fair Share ◽  
Social Proof

This chapter presents a location-based affective computing system, which can assist growing emerging markets by helping them reduce crime and increase public safety when used in conjunction with CCTV. Internet systems based on location-based services have increased in availability. Social platforms such as Twitter and Facebook now employ the information on user locations to provide context to their posts, and services such as Foursquare rely on people checking into different places, often to compete with their friends and others. Location-based information, when combined with other records, such as CCTV, promotes the opportunity for a better society. People normally abused by corrupt state officials for crimes they did not commit will now have alibis, shops will be able to more effectively build trust and procure new customers through “social proof,” and other forms of corruption will be tackled such as benefit fraud and tax evasion. Trust that everyone is paying his or her fair share can develop.

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