{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Ch 10 Slides (1)

In relying on per capita gdp for comparison of

Info iconThis preview shows pages 16–22. Sign up to view the full content.

View Full Document Right Arrow Icon
In relying on per capita GDP for comparison of different countries, one should use PPP exchange rates, rather than the market exchange rates. PPP adjustment provides a more realistic indicator of purchasing power of consumers in emerging and developing economies. PPP adjusted per capita GDP represents the amount of products that consumers can buy in a given country, using their own currency and consistent with their own standard of living . International Business: The New Realities 10-16
Background image of page 16

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Magnitude of Middle-Class Population for a Sample of Emerging Markets
Background image of page 17
Key Criteria for Assessing the Attractiveness of Emerging Markets and Developing Economies Market Size : the country’s population, especially those living in urban areas. Market Growth Rate : the country’s real GDP growth rate. Market Consumption Capacity : income of the middle class Commercial Infrastructure : density of telephone lines, number of personal computers, density of paved roads, population per retail outlet, and other such characteristics. Economic Freedom : the degree to which government intervenes in business activities. Country Risk: degree of political risk. International Business: The New Realities 10-18
Background image of page 18

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Challenges of Doing Business in Emerging Markets Political stability – corruption, weak legal systems, and unreliable government authorities increase business risks and costs, and hinder forecasting. Weak intellectual property protection – discourages producing or selling goods that entail valuable assets. Bureaucracy, red tape, and lack of transparency -- burdensome rules, excessive requirements for licenses, approvals, and paperwork; not accountable legal and political systems. E.g., it may take years, or many bribes, to obtain permissions to do business. China, India, and Russia are particularly problematic. International Business: The New Realities 10-19
Background image of page 19
Challenges in Emerging Markets (cont’d) Poor physical infrastructure – Basic infrastructure – such as – high -quality roads, drainage systems, sewers, and electrical utilities – are often sorely lacking in emerging markets. Partner availability and qualifications – given emerging market challenges, foreign firms may seek local partners, who provide access to markets, supplier and distributor networks, and key government contacts. But qualified partners are often hard to find, or require much assistance to upgrade their abilities. International Business: The New Realities 10-20
Background image of page 20

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Challenges in Emerging Markets (cont’d) Dominance of family conglomerates economies are often dominated by privately-owned local companies that are highly diversified, and control supplies and employment. Common in South Korea (
Background image of page 21
Image of page 22
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page16 / 25

In relying on per capita GDP for comparison of different...

This preview shows document pages 16 - 22. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online