BUSS1000 Lecture Notes - Lecture 10: Free Trade, Resource-Based View, Imitation
24 Jun 2018
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Emerging economies:
- countries with largest economic potential and that are of interest to investors today
(Magnus, 2010).
- have some characteristics of a developed market, but do not meet all of the standards of
developed markets (MSCI, 2014).
Characteristics of emerging economies (Amadeo, 2016)
- Lower-than-average per capita income
- Rapid growth
- High volatility
- Capital markets are less mature
Countries: (E7)
1. China
2. India
3. Brazil
4. Mexico
5. Russia
6. Indonesia
7. Turkey
- They all have a sea port
- Access to trade
- Have a range of inflation
- G7 uses more oil + CO2
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Why are emerging economies
important to business?
- Infrastructure increase
- Oil and energy use relates to economic activity
- Population increase
- China has had an increase
Floor space
- The demand for residential floor space is expected to increase by 90% by 2025
- As incomes rise the average number of people per household decreases
- The demand for dwellings is increasing due to both population increase and
smaller average household size.
- The demand for commercial floor space is expected to increase by 75% by 2025
- A total increase of approximately 80,000 km2
- Apartments = reduces floor space
Water
- Sanitation is a key driver of early urban population expansion
- As economies and populations expand the provision of water treatment infrastructure for
drinking and sanitation also increase
- By 2050
- Increase in water usage to 270 billion cubic metres p.a.
- Investment of US$480 billion
- For perspective Sydney harbour volume in 562 million cubic metres
Shipping containers
- Increased economic activity requires increased transportation of goods
- Emerging markets will generate 85% of the increase in demand for containerised
transport
- Over 90% of consumer goods are transported by containers, through sea ports
- Increased demand for coal, iron ore etc
- Transportation of goods requires energy
- Increased demand for oil and petroleum
- Increased demand leads to increased prices globally - including energy
- Not sustainable
Rise of the new middle class
- Increase income
- Increase spending power
The World Bank’s measure of middle class is US$2-$13 per days
- Not the developed economy standards
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Emerging economies: countries with largest economic potential and that are of interest to investors today (magnus, 2010). have some characteristics of a developed market, but do not meet all of the standards of developed markets (msci, 2014). Oil and energy use relates to economic activity. The demand for residential floor space is expected to increase by 90% by 2025. As incomes rise the average number of people per household decreases. The demand for dwellings is increasing due to both population increase and smaller average household size. The demand for commercial floor space is expected to increase by 75% by 2025. A total increase of approximately 80,000 km2. Sanitation is a key driver of early urban population expansion. As economies and populations expand the provision of water treatment infrastructure for drinking and sanitation also increase. Increase in water usage to 270 billion cubic metres p. a. For perspective sydney harbour volume in 562 million cubic metres.
