International Trade and competitiveness

Description Choose from the final rubric the country and the emerging market that it is easy for you to talk about. EMEs are truly fascinating. While socioeconomic conditions are unique to each EME, they have some common elements: The economy has embarked on economic development and/or fiscal reforms. The economy is the recipient of some type of foreign aid (for example, from the World Bank, IMF (International Monetary Fund), United Nations, European Union, and/or United States). The economy shows a strong increase in local and foreign direct investment (Beckmann & Czudaj, 2017). The economy has an increased level of financial and/or political volatility that increases investment risk. The economy is transitional as it moves away from market restrictions to a more free, unrestricted, and transparent economy. For example, this would include former or currently communist countries adopting a capitalist financial system. Risks Business activity involves a lot of risk. Even in developed economies, there are no assurances that a business will thrive and be successful. For companies seeking to successfully expand to EMEs, leadership must understand the risks of those markets prior to market entrance. The economic landscape is strewn with the wrecks of companies who failed to account for risks before embarking on expensive expansions (Liu, Gao, Lu, & Lioliou, 2016). Following are some risks unique to EMEs: Political instability Endemic and systemic corruption Unstable economy Opportunities There is purportedly an ancient Arabian proverb that illustrates opportunities in an EME: A crisis is an opportunity riding the dangerous wind. Despite the risks inherent in EMEs, there is also opportunity for much success (Urban, 2014). References Beckmann, J., & Czudaj, R. (2017). Capital flows and GDP in emerging economies and the role of global spillovers. Journal of Economic Behavior & Organization, 142 140-163. Liu, X., Gao, L., Lu, J., & Lioliou, E. (2016). Environmental Risks, Localization and the Overseas Subsidiary Performance of MNEs from an Emerging Economy. Journal of World Business, 51(3), 356-368. Urban, B. (2014). The importance of attributes in entrepreneurial opportunity evaluations: An emerging market study. Managerial & Decision Economics, 35(8), 523-539.

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