MGMT3102 Lecture Notes - Lecture 10: Emerging Markets, Mixed Economy, Management System
Document Summary
Mgmt3102 lecture 10 emerging market firms, multinational enterprises and institutional context in developing countries. Institutions provide framework within which firms conduct business in an economy: formal institutions: constitutions, laws and regulations, property rights protection, contracts. Inadequate physical infrastructure: subnational variations (many underdeveloped regions, transportation road, rail, bridges limited networks that links key cities, power generation unreliable / intermittent/shortages, communication infrastructure underdeveloped telecom, postal service, courier service. Institutional weaknesses and voids: factor markets capital and labour, product markets. Intermediaries include support services such as logistics, distribution etc: tapping into these intermediaries requires familiarity with the local language and culture. It takes local expertise to access scattered information and analyse data of variable quality: evaluating the credit of small and medium enterprises is tough due to the lack of data on them. Implications: domestic banks, with their local knowledge and informal connections, cater to the segment then foreign banks do.
