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Doing business in the Newly Emerging Economies - Coggle Diagram
Doing business in the Newly Emerging Economies
Why Invest in the Capital Markets of the Emerging Economies?
Higher investment return, based on the higher interest rates than in the developed countries
Enough variety of government and corporate securities denominated in convertible currencies
An opportunity to diversify the portfolio among different countries and regions
Tax preferences in the issuing countries, secured by double taxation treaties.
Financial Markets
Stock Market
Bond Market
Credit Market
Foreign Direct Investment
The magnitude and pattern of FDI toward particular country or region differ in correspondence with few crucial factors: (a) level of socio-economic development; (b) endowments with natural resources; (c) functionality of the market institutions and mechanisms; (d) character of the host-country economic policy; (e) stability of the foreign-exchange market; (f) political stability; and (g) legal system and law enforcement.
The market’s size is another factor. The smaller emerging economies support investment in productions with relatively low fixed cost because of the limitation of the economies-of-scale effect.
Advantages of the Foreign Trade in Emerging Economies
Ongoing liberalization of the trade regime
Excellent opportunities for re-exporting from the special free
trade zones
Increasing purchasing power and higher demand of consumer durable and nondurable goods
Large-scale industrialization and strong demand for capital goods, including the most sophisticated technologies
Economic restructuring, oriented toward preferable development of the sector of services. It opens opportunities for both import and export of services
An opportunity for the producers from the developed countries to extend their product’s life cycle by entering new markets or new market niches
Good options to combine the product export with direct investments and production cooperation, including exploitation of sub-contracting systems with local producers. It may reinforce the price competitiveness of the finished product on the host country or on the world market
Enhanced terms of trade with the developed countries
Import of healthier, organic agro product.