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MGCR 382 (143)
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Chapter 9.docx

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Management Core
Course Code
MGCR 382
John Saba

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Emerging markets Developed economies Post-industrial countries  Market or mixed economies (developed commercial infrastructure) High GDP and income per capita  55%+ of the world’s GDP Developing economies (120 countries) Produce 4% of world’s GDP Lowest GDP and income per capita, consumers have low discretionary incomes, limited industrialization and stagnant economies  Combination of low incomes and high birth rates tend to enforce poverty Other negative  Short life expectancy, high infant mortality, significant malnutrition, poor educational; systems and illiteracy  Government debt levels approach or exceed annual GDP o Its government discourages new business Emerging market economies Middle category between developed and developing economies Key characteristics  Improving living standards, growing middle class, evolving toward developed country status, importance in the world economy increasing, strong annual average GDP growth rates P.252 – exhibit 3 / p.253 exhibit 4 Four factors that make emerging markets attractive (repeating text) Six challenges of doing business in emerging markets (repeating text) The four tigers South Korea, Taiwan, Hong Kong, Singapore Had high rates of economic growth and industrialization – all four tigers have become emerging markets, and high income economies  But attention has shifted to other Asian economies which are now experiencing faster economic growth These countries abandoned the import substitution model. Instead they undertook the export driven model alike Japan  Focus on exports to richer, developed countries, domestic consumption was discouraged through government policies such as high import tariffs, and invested in education to improve productivity o Effects – trade surplus, higher savings All fours tigers have specialized in areas where their relatively cheap skilled and productive labor gives them a competitive advantage (Hong Kong+ Singapore -> international financial centers ; South Korea+ Taiwan -> leader in information, technology and electronics) Singapore’s government does not interfered with the economy (city state) South Korea Incredible record of growth and global integration to become a high-tech industrialized economy.  Export driven growth: o Government leadership n the economy o Close government and business ties  Large family conglomerates (chaebols – large conglomerate of privately owned firms. They are powerful global MNCs owning many international firms. They employ few of the country’s workforce)  The cost of chaebol-led succes
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