Emerging markets
From Wikipedia, the free encyclopedia
The term emerging markets is used to describe a nation's social, or business activity in the process of rapid industrialization. According to The Economist many people find the term dated, but a new term has yet to gain much traction.[1]
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[edit] Terminology
Originally brought into fashion in the 1980s by then World Bank economist Antoine van Agtmael,[2] the term is sometimes loosely used as a replacement for emerging economies, but really signifies a business phenomenon that is not fully described by or constrained to geography or economic strength; such countries are considered to be in a transitional phase between developing and developed status. Examples of emerging markets include China,[3] India, Pakistan, Mexico, Brazil [4], Peru, Chile, Colombia, Argentina, much of Southeast Asia, countries in Eastern Europe, the Middle East, parts of Africa and Latin America. Emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets."[5]
The research on emerging markets is diffused within management literature. While researchers including C. K. Prahalad, George Haley, Hernando De Soto, Usha Haley, and several professors from Harvard Business School and Yale School of Management have described activity in countries such as India and China, how a market emerges is little understood.
In the 2008 Emerging Economy Report [6] the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization." It appears that emerging markets lie at the intersection of non-traditional user behavior, the rise of new user groups and community adoption of products and services, and innovations in product technologies and platforms.
The term "rapidly developing economies" is now being used to denote emerging markets such as The United Arab Emirates, Chile and Malaysia that are undergoing rapid growth.
In recent years, new terms have emerged to describe the largest developing countries such as BRIC and BRIMC that stand for Brazil, Russia, India, Mexico, and China. These countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms.
A large number of research works are in progress at leading universities and business schools to study and understand various aspects of Emerging Markets.
[edit] MSCI list
It is difficult to make an exact list of emerging (or developed) markets; the best guides tend to be investment information sources like ISI Emerging Markets and The Economist or market index makers (such as Morgan Stanley Capital International). These sources are well-informed, but the nature of investment information sources leads to two potential problems. One is an element of historicity; markets may be maintained in an index for continuity, even if the countries have since developed past the emerging market phase. Possible examples of this are South Korea, Taiwan and Israel. A second is the simplification inherent in making an index; small countries, or countries with limited market liquidity are often not considered, with their larger neighbours considered an appropriate stand-in.
The Big Emerging Market (BEM) economies are Brazil, China, Egypt, India, Indonesia, Mexico, Poland, Philippines, Russia, South Africa, South Korea and Turkey.[7]
Newly industrialized countries are emerging markets whose economies have not yet reached first world status but have, in a macroeconomic sense, outpaced their developing counterparts.
As of June 2006, the Morgan Stanley Emerging Markets Index included:[8]
The list tracked by The Economist is the same, except with 
Hong Kong, 
Singapore and 
Saudi Arabia included (MSCI classifies the first two as Developed Markets)
[edit] FTSE Global Equity Index
The FTSE Group classifies countries into four categories, the process by which stock markets are classified as either Developed or Emerging markets within the FTSE Global Equity Index Series. The categories are Developed, Advanced Emerging, Secondary Emerging, and Frontier.
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FTSE, helped by an expert committee of market practitioners, reviews quality of market criteria for all stock markets included in FTSE GEIS to assess the ease, cost and security of underlying investment transactions by international investors in all countries.[10] |
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FTSE classification, as of September 2008:[11]
Developed: 
Australia, 
Austria, .svg){kind=small}
Belgium, 
Canada, 
Denmark, 
Finland, 
France, 
Germany, 
Greece[12], Hong Kong, 
Ireland, 
Israel, 
Italy, 
Japan, 
Luxembourg, 
Netherlands, 
New Zealand, 
Norway, 
Portugal, Singapore, 
South Korea[13], 
Spain, 
Sweden, 
Switzerland, 
United Kingdom, 
United States.
Advanced Emerging: 
Brazil, 
Hungary, 
Mexico, 
Poland, 
South Africa, 
Taiwan[14].
Secondary Emerging: 
Argentina[15], 
Chile, 
China, 
Colombia[15], 
Czech Republic, 
Egypt, 
India, 
Indonesia, 
Malaysia, 
Morocco, 
Pakistan, 
Peru, 
Philippines, 
Russia, 
Thailand, 
Turkey.
Frontier: 
Bahrain, 
Bangladesh, 
Botswana, 
Bulgaria, 
Croatia, 
Cyprus, 
Estonia, 
Côte d'Ivoire, 
Jordan, 
Kenya, 
Lithuania, 
Republic of Macedonia, 
Mauritius, 
Nigeria, 
Oman, 
Qatar, 
Romania, 
Serbia, 
Slovakia, 
Slovenia, 
Sri Lanka, 
Tunisia, 
Vietnam.
[edit] See also
[edit] References
- ^ "Acronyms BRIC out all over", The Economist (September 18, 2008). Retrieved on September 21, 2008.
- ^ FT.com / Columnists / John Authers - The Long View: How adventurous are emerging markets?
- ^ Five Years of China’s WTO Membership. EU and US Perspectives on China’s Compliance with Transparency Commitments and the Transitional Review Mechanism, Legal Issues of Economic Integration, Kluwer Law International, Volume 33, Number 3, pp. 263-304, 2006. by Paolo Farah
- ^ Alternative Stock Library / Looking for Escape? Go Brazil!
- ^ [1]
- ^ Emerging Economy Report
- ^ Yale University Library: Emerging Markets - The Big Ten Countries
- ^ Morgan Stanley Emerging Markets Index MSCI Emerging Markets. Retrieved on 2008-09-19.
- ^ http://www.mscibarra.com/products/indice/licd/em.html
- ^ FTSE Country Consultation Results March 2004
- ^ See FTSE Country Classification, September 2008
- ^ Possible change to Advanced Emerging.
- ^ From September 2009.
- ^ Possible change to Developed.
- ^ a b Possible change to Frontier.
[edit] Sources
- Goldman Sachs Paper No.134 BRIMC (English)
- Michael Pettis, The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (2001) ISBN 0-19-514330-2
[edit] External links
- What Are Emerging Markets? University of Iowa Center for International Finance and Development
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