While no generally agreed upon definition for emerging markets exists, the term refers to low-income countries which generally have a rapid pace of economic development and where government policies favour economic liberalization (Hoskisson et al, 2000). These markets not only do some have high economic growth rates but nearly all have high population growth rates (Reynolds, 2006).
Some countries can be identified as big emerging markets. According to the World Bank, the five biggest emerging markets are China, India, Indonesia, Brazil and Russia. Other countries that are also considered as emerging markets include Mexico, Argentina, South Africa, Poland, Turkey, and South Korea.
Department of Commerce estimates that over 75 percent of the expected growth in the world trade over the next two decades will come from the more than 130 developing and newly industrialized countries; a small core of these countries will account for more than half of that growth. Commerce researcher also predict that imports to the countries identified as big emerging markets, with half of the world's population and accounting for 25 percent of the industrialized world's GDP today, will by 2010 be 50 percent of that of the industrialized world (Cateora et al, 2006). World Bank has estimated that if current trend continue, by 2020 the Chinese economy could be larger than that of the United States, while the economy of India will approach that of Germany (Economist, 1994).
CHARACTERISTIC OF EMERGING MARKETS
Emerging markets stand out due to a number of major characteristics. Certain of these may well apply to other markets as well, but an emerging market generally carries a large number of these features. The main characteristics of big emerging markets can be summarized as follows:
a) High growth rate:
Emerging markets generally enjoy high growth rates which are often perceived as attractive by investors, although some countries usually described as...
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