Adjustment to emerging economies is benefited if Western expatriates recognise they are experiencing a liminal situation, which can lead to the instrumental utilisation of coping strategies as equivalent to rites of passage between distinct ethical frameworks. Given the characteristics ascribed to rites, the ethical dilemma resulting from the simultaneous demand to abide by local rules and to respect Western ethical principles is more easily solved. Consequently, effective and sustainable adjustment is favoured. Implications for organisations and individuals are discussed.

This paper studies the cross-country incidence of the 2008-2009 global crisis and documents a structural break in the way emerging economies responded to the global shock. Contrary to popular perceptions, emerging market economies suffered growth collapses comparable, or even larger, to those experienced by advanced economies during the crisis. With such large financial and real shock, most of the world economy came to a halt when the crisis hit, with most countries resuming their pre-crisis growth rates afterwards. While emerging economies were not able to avoid the crisis collapse, they grew at a higher rate during the post crisis, relative to before and, as usual, to advanced countries. Moreover, emerging economies initiated their recovery sooner. Breaking with the past, emerging economies were able to conduct countercyclical policies, and became more similar to developed countries in softening the impact of the crisis and in their ability to pursue expansionary policies.

This book seeks to contribute to the sharing of knowledge between Brazil, India, and South Africa, three of the largest emerging economies today. By assessing and comparing the investment climate in each, the authors seek to profile concrete steps that countries can take to improve the business environment. The authors focus particularly on identifying the commonalities and differences both within and among the three countries and attempt to highlight examples where policy makers will be able to drawn on the lessons from their own reform experiences and those of their counterparts in other core emerging markets. The book is organized as follows: (1) Provides a brief overview of the investment climate in each of the three countries, highlighting the key constraints identified by the national business communities, and explains the underlying concepts of the investment climate assessments and doing business indicators. (2) Examines the macroeconomic performance of Brazil, India, and South Africa and shows how the three countries perform with regard to taxation and foreign trade and exchange. (3) Reviews key microeconomic regulations...

This paper estimates the impact of aggregate fluctuations on the time-varying trade policies of 13 major emerging economies over 1989-2010. By 2010, these World Trade Organization member countries collectively accounted for 21 percent of world merchandise imports and 22 percent of world gross domestic product. The paper examines determinants of carefully constructed, bilateral measures of new import restrictions on products arising through the temporary trade barrier (TTB) policies of antidumping, safeguards, and countervailing duties. The approach explicitly addresses changes to the institutional environment facing these emerging economies as they joined the WTO and adopted disciplines to restrain their application of other trade policies, such as applied import tariffs. The paper presents evidence of a counter-cyclical relationship between macroeconomic shocks and new TTB import restrictions in addition to an important role for fluctuations in bilateral real exchange rates. Furthermore, for the subset of major Group of 20 emerging economies...

The authors study the determinants of the growing migration of stock market activity to international financial centers. They use a sample of 77 countries and document that higher economic growth and more macroeconomic stability help stock market development. Countries with higher income per capita, sounder macroeconomic policies, more efficient legal systems, better shareholder protection, and more open financial markets tend to have larger and more liquid stock markets. The authors show that these factors also drive the degree with which capital raising, listing, and trading have been migrating to international financial centers. As fundamentals improve and technology advances, this migration will likely increase and domestic stock market activity may become too little to support local markets. For many emerging economies, the best policy is to establish sound fundamentals but not necessarily the trading, or even listing of securities locally.

The authors show that systemic risk exerts a significant impact on the behavior of depositors, sometimes overshadowing their responses to standard bank fundamentals. Systemic risk can affect market discipline both regardless of and through bank fundamentals. First, worsening systemic conditions can directly threaten the value of deposits by way of dual agency problems. Second, to the extent that banks are exposed to systemic risk, systemic shocks lead to a future deterioration of fundamentals not captured by their current values. Using data from the recent banking crises in Argentina and Uruguay, the authors show that market discipline is indeed quite robust once systemic risk is factored in. As systemic risk increases, the informational content of past fundamentals declines. These episodes also show how few systemic shocks can trigger a run irrespective of ex-ante fundamentals. Overall, the evidence suggests that in emerging economies, the notion of market discipline needs to account for systemic risk.

The authors test for emerging economies, the hypothesis - previously verified only for the Group of 10 (G-10) countries - that enforcing bank capital asset requirements, exerts a negative effect on the supply of credit. Their econometric analysis of data on individual banks, suggests three main results: 1) Enforcement of capital asset requirements - according to the 1998 Basel standard - significantly curtailed credit supply, particularly at less-well-capitalized banks. 2) This negative effect is not limited to countries enforcing capital asset requirements in the aftermath of a currency, or financial crises. 3) The adverse impact of capital requirements on the credit supply was somewhat smaller for foreign-owned banks, suggesting that opening up to foreign investors, may be an effective way to partly shield the domestic banking sector from negative shocks. Overall, by inducing banks to reduce their lending, enforcement of capital asset requirements may well have induced an aggregate slowdown, or contraction in credit in the emerging economies examined. The results have relevance for the ongoing debate on the impact of the revision of bank capital asset requirements...

This paper constructs indicators of structural bottlenecks arising from barriers to open markets, obstacles to business operations, and constraints to access to finance. Empirical evidence from a sample of 30 emerging economies indicates that barriers to open markets and access to finance are significantly associated with differences in total factor productivity growth in the post-global financial crisis period compared with the pre-crisis period -- with countries with fewer barriers showing stronger recovery and resilience. Barriers to access to finance are also associated with differences in the performance of private investment. Reforms to improve the policy framework in these areas, up to the level of the best-ranking countries, could offset the recently observed growth slowdown in emerging economies. These reforms would revitalize potential growth and mitigate the risks from external shocks associated with the global environment in the transition from the global financial crisis.

This paper estimates the impact of aggregate fluctuations on the time-varying trade policies of thirteen major emerging economies over 1989–2010; by 2010, these WTO member countries collectively accounted for 21% of world merchandise imports and 22% of world GDP. We examine determinants of carefully constructed, bilateral measures of new import restrictions on products arising through the temporary trade barrier (TTB) policies of antidumping, safeguards, and countervailing duties. We find evidence of a counter-cyclical relationship between macroeconomic shocks and new TTB import restrictions as well as an important role for fluctuations in bilateral real exchange rates. Furthermore, the trade policy responsiveness coinciding with WTO establishment in 1995 suggests a significant change relative to the pre-WTO period; i.e., new import restrictions became more counter-cyclical and sensitive to real exchange rate shocks over time. Finally, we also present results that explicitly address changes to the institutional environment facing these emerging economies as they joined the WTO and adopted disciplines to restrain their application of other trade policies such as applied import tariffs.

In the aftermath of the global financial crisis, interest in systemic risk has surged among academics and policy makers. The mitigation of systemic risk is now widely accepted as the fundamental underlying concept for the design of the post-crisis regulatory agenda. Effective mitigation requires the presence of a well-developed analytical methodology for monitoring systemic risk, so that policy makers can make informed policy choices. This remains a challenging area, particularly in developing and emerging economies characterized by rapid structural changes and gaps in data availability. This working paper aims to provide policy makers in developing and emerging economies with practical tools for the analysis of systemic risk, focusing on the identification of domestic, systemically important banks; analyzing interconnectedness within the financial system; and analyzing the cyclical component of systemic risk.

Do exports resume when import-restricting temporary trade barriers such as antidumping are finally removed? To establish the importance of this question for emerging economies, this paper uses newly available data from the World Bank's Temporary Trade Barriers Database to update a number of inter-temporal indicators of import protection along three dimensions: additional time coverage through 2011, additional policy-imposing country coverage, and a more comprehensive depiction of impacted trading partner coverage. It then turns to the emerging economy exporters affected by temporary trade barriers and highlights the economic significance of frequently bilateral import restrictions imposed by other emerging economies, i.e., South-South protectionism. Finally, it then investigates empirically whether country-level exports resume when the previously imposed -- but temporary -- import protection is finally removed. China's exporters respond quickly and aggressively to the market access opening embodied in the removal of such import restrictions. This differs markedly from the slow and tepid export response of other emerging economies...

The authors argue that emerging economies borrow short term due to the high risk premium charged by international capital markets on long-term debt. They first present a model where the debt maturity structure is the outcome of a risk-sharing problem between the government and bondholders. By issuing long-term debt, the government lowers the probability of a liquidity crisis, transferring risk to bondholders. In equilibrium, this risk is reflected in a higher risk premium and borrowing cost. Therefore, the government faces a tradeoff between safer long-term borrowing and cheaper short-term debt. Second, the authors construct a new database of sovereign bond prices and issuance. They show that emerging economies pay a positive term premium (a higher risk premium on long-term bonds than on short-term bonds). During crises, the term premium increases, with issuance shifting toward shorter maturities. This suggests that changes in bondholders' risk aversion are important to understand emerging market crises.

The Basel 1988 Capital Accord is arguably the most successful of all recent financial "standards." Although it was designed for internationally active banks in G10 countries, more than 100 countries claim to adhere to it, and many apply the Accord to all banks. Significant changes to this Accord are currently under discussion. The author reviews the current proposals (published in January 2001) from the standpoint of an emerging market. He then addresses how implementation in G10 countries will affect the cost of capital to emerging economies. The new proposals make considerable advances in linking risk and regulatory capital for internationally active banks, especially for their corporate loan book. But the corporate-calibrated internal ratings-based (IRB) approach leads to significant changes in capital requirements and spreads for banks that lend to emerging countries. The author proposes that for sovereign lending, banks should develop internal ratings according to an S&P or Moody's scale, and capital charges be levied at the corresponding weights given by the standardized approach. The author argues that the more detailed and specific the proposals are for G10 internationally active banks...

Firm survival in emerging economies is often related to having access to valuable resources that are in stakeholders' hands. However, the literature on strategy in emerging economies provides scant information on the efficiency of acquiring stakeholder resources and its effect on firm performance. We investigated the stakeholder interaction effects on performance of domestic firms competing in an emerging market (Wright, Filatotchev, Hoskisson, & Peng, 2005) from a contractual perspective (Williamson, 1985). We argue that interacting stakeholders in a contractual set yield synergistic governance structures that allow firms more efficient access to external resources. Using a sample of 267 firms in Brazil (secondary data), we explored different patterns in stakeholder contracting with community, government, top management, and employees. A three-stage analysis process was devised: cluster analysis, general linear model estimation and verification tests. Results suggest that stakeholder interaction has a positive impact on firm performance. The conjoint effect of government and community contracts was found to yield superior firm performance as they provide a basic structure for contracting with other interacting stakeholders.

Based on an behavioral equilibrium exchange rate model, this paper examines the determinants of the real effective exchange rate and evaluates the degree of misalignment of a group of currencies since 1980. Within a panel cointegration setting, we estimate the relationship between exchange rate and a set of economic fundamentals, such as traded-nontraded productivity differentials and the stock of foreign assets. Having ascertained the variables are integrated and cointegrated, the long-run equilibrium value of the fundamentals are estimated and used to derive equilibrium exchange rates and misalignments. Although there is statistical homogeneity, some structural differences were found to exist between advanced and emerging economies.

This the author accepted manuscript. The final published version can be found on the publisher's website at: http://www.sciencedirect.com/science/article/pii/S0304387814000522# ? 2014 Published by Elsevier B.V.; This paper estimates the impact of aggregate fluctuations on the time-varying trade policies of thirteen major emerging economies over 1989-2010; by 2010, these WTO member countries collectively accounted for 21 percent of world merchandise imports and 22 percent of world GDP. We examine determinants of carefully constructed, bilateral measures of new import restrictions on products arising through the temporary trade barrier (TTB) policies of antidumping, safeguards, and countervailing duties. We find evidence of a counter-cyclical relationship between macroeconomic shocks and new TTB import restrictions as well as an important role for fluctuations in bilateral real exchange rates. Furthermore, the trade policy responsiveness coinciding with WTO establishment in 1995 suggests a significant change relative to the pre-WTO period; i.e., new import restrictions became more counter-cyclical and sensitive to real exchange rate shocks over time. Finally, we also present results that explicitly address changes to the institutional environment facing these emerging economies as they joined the WTO and adopted disciplines to restrain their application of other trade policies such as applied import tariffs.

Com o aprofundamento da crise financeira internacional no segundo semestre de 2008, diversas empresas produtivas de economias emergentes registraram enormes perdas nos mercados de derivativos de câmbio. Esse fato aponta para a dinâmica, muitas vezes, especulativa, das corporações no ambiente das finanças desregulamentadas. O objetivo do artigo reside em articular tais aspectos da lógica de atuação das empresas com a crise e discutir os impactos macroeconômicos dos prejuízos financeiros resultantes de apostas especulativas em derivativos.; As a consequence of the deepening of the international financial crisis during the second semester of 2008, several productive companies from emerging economies have registered enormous losses in the foreign exchange derivatives markets. This fact points to the speculative dynamics of corporations in the financial deregulation environment. This paper aims to articulate this logic of enterprises' behavior with the crisis and to discuss some macroeconomic effects resulting from the financial losses caused by speculative bets in the derivative markets.

A majority of the literature on corporate social responsibility (CSR) reporting focuses on efforts made by companies headquartered in North America and Europe. Nevertheless, many profitable companies from countries with emerging economies are beginning to report on their social and environmental performance. However, the quality of these CSR reports is relatively unknown. Therefore, the purpose of this project is to benchmark six different company’s sustainability reports in order to determine the quality of reporting that exists for companies based in emerging economies. Based on the project’s findings, it will be determined whether or not the initial hypotheses concerning the quality of these companies’ sustainability reports were correct. In order to truly determine the quality of CSR reports of companies from countries with emerging economies, it would be necessary to look at a variety of different sectors. Nevertheless, because of the narrow scope of this project, the analysis will only focus on the petroleum-refining sector. By using the standardized benchmarking system developed by SustainAbility Ltd. and UNEP, a compare and contrast analysis will be conducted of each of the six chosen petroleum-refining companies’ CSR reports. Ultimately...

This dissertation computes the optimal monetary and fiscal policy for small open and emerging economies in an estimated medium-scale model. The model departs from the conventional approach as it encompasses all the major nominal and real rigidities normally found in the literature in a single framework. After estimating the model using Bayesian techniques for one small open economy and one emerging economy, the Ramsey solution for the optimal monetary and fiscal policy is computed. Results show that foreign shocks have a strong influence in the dynamics of emerging economies, when compared to the designed optimal policy for a developed small open economy. For both economies, inflation is low, but very volatile, while taxes follow the traditional results in the literature with high taxes over labor income and low taxes for capital income.

; Dissertation

In recent decades, profound changes in the structure of the global economy have reshaped global production and trade and have altered the organization of industries and national economies into global value chains (GVCs). As GVCs became global in scope, more intermediate goods were traded across borders, and more imported parts and components were integrated into exports. In 2009, world exports of intermediate goods exceeded the combined export values of final and capital goods for the first time. New governance structures reinforce the organizational consolidation occurring within GVCs and the geographic concentration associated with the growing prominence of emerging economies as key economic and political actors. Emerging economies are playing significant and diverse roles in GVCs. During the 2000s, they were simultaneously major exporters of intermediate and final manufactured goods (China, South Korea, and Mexico) and primary products (Brazil, Russia, and South Africa). However, market growth in emerging economies has also led to shifting end markets in GVCs, as more trade has occurred between developing economies (often referred to as South-South trade in the literature), especially since the 2008–09 economic recession. China has been the focal point of both trends: it is the world’s leading exporter of manufactured goods and the world’s largest importer of many raw materials...