Doing Business in Emerging Markets: the Institutional Framework and Other Highlights

INTRODUCTION
The rapid growth in emerging markets has caused increased attention among academic, private and governmental bodies. High growth rates, cheap labor and other explicit advantages of doing business in an emerging market have indeed attracted multinational enterprises (MNEs) that are increasingly entering these markets. While growth has been moderated in mature Western markets, the rise of developing countries has fundamentally changed the strategic landscape for MNEs. The majority of MNEs, regardless of their size and business operations, will at some point have to take emerging markets into considerations, in one way or another (Hansen et al. 2010). Studies and research upon doing business in emerging markets are, accordingly, becoming a necessity and more and more influential in the paradigm of International Business.
This paper aims to elaborate on the framework of MNEs doing business in emerging markets by applying relevant theories that have been discussed throughout the course of International Business.  

DEFINING EMERGING MARKETS
In regards to classifying emerging markets, there do exist a rather long list of countries, but among this list of countries, there is a tendency to look at the BRIC countries - Brazil, Russia, India and China.   The BRIC acronym was coined to describe the four most eminent emerging countries with enormous growth potential, huge populations, and vast natural resources. These four countries have shown remarkably resilience and continual growth over the past 15 – 20 years. There are also other countries that have shown significant and robust growth such as South Korea, Turkey, Indonesia, Mexico, South Africa, Poland, Saudi Arabia, Taiwan, Iran, Argentina and Thailand (EconomyWatch.com 2010). Accordingly, there are a vast number of countries that are being referred to as ‘land of opportunities’. The term ‘emerging markets’ has frequently been used to describe countries that are widely considered...