Emerging market

   Developing countries that are neither part of the least developed countries, nor of the newly industrialized countries

In the 1970s, "less developed countries" (LDCs) was the common term for markets that were less "developed" (by objective or subjective measures) than the developed countries such as the United States, Japan, and those in Western Europe. These markets were supposed to provide greater potential for profit but also more risk from various factors like patent infringement. This term was replaced by emerging market. The term is misleading in that there is no guarantee that a country will move from "less developed" to "more developed"; although that is the general trend in the world, countries can also move from "more developed" to "less developed".

Originally coined in 1981 by then World Bank economist Antoine Van Agtmael,[7][8] the term is sometimes loosely used as a replacement for emerging economies, but really signifies a business phenomenon that is not fully described or constrained by such; these countries are considered to be in a transitional phase between developing and developed status. Examples of emerging markets include many countries in Africa, most countries in Eastern Europe, some countries of Latin America, some countries in the Middle East, Russia and some countries in Southeast Asia. Emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets".[9]

The research on emerging markets is diffused within management literature. While researchers including, George Haley, Vladimir Kvint, Hernando de Soto, Usha Haley, and several professors from Harvard Business School and Yale School of Management have described activity in countries such as India and China, how a market emerges is little understood.

In 2009, Dr. Kvint published this definition: "Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions"[10] In 2008 Emerging Economy Report,[11] the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization". It appears that emerging markets lie at the intersection of non-traditional user behavior, the rise of new user groups and community adoption of products and services, and innovations in product technologies and platforms.

More critical scholars have also studied key emerging markets like Mexico and Turkey. Thomas Marois (2012, 2) argues that financial imperatives have become much more significant and has developed the idea of 'emerging finance capitalism' - an era wherein the collective interests of financial capital principally shape the logical options and choices of government and state elites over and above those of labor and popular classes.[12]

Julien Vercueil recently proposed an pragmatic definition of the "emerging economies", as distinguished from "emerging markets" coined by an approach heavily influenced by financial criteria. According to his definition, an emerging economy displays the following characteristics:[13]

1. Intermediate income: its PPP per capita income is comprised between 10% and 75% of the average EU per capita income.
2. Catching-up growth: during at least the last decade, it has experienced a brisk economic growth that has narrowed the income gap with advanced economies.
3. Institutional transformations and economic opening: during the same period, it has undertaken profound institutional transformations which contributed to integrate it more deeply into the world economy. Hence, emerging economies appears to be a by-product of the current globalization.

At the beginning of the 2010s, more than 50 countries, representing 60% of the world's population and 45% of its GDP, matched these criteria.[13]^:10 Among them, the BRICs.

Newly industrialized countries as of 2013. This is an intermediate category between fully developed and developing.

The term "rapidly developing economies" is being used to denote emerging markets such as The United Arab Emirates, Chile and Malaysia that are undergoing rapid growth.

In recent years, new terms have emerged to describe the largest developing countries such as BRIC that stands for Brazil, Russia, India, and China,[14] along with BRICET (BRIC + Eastern Europe and Turkey), BRICS (BRIC + South Africa), BRICM (BRIC + Mexico), MINT (Mexico, Indonesia, Nigeria and Turkey), Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, and Vietnam) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa).[15] These countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms.

Lists of emerging (or developed) markets vary; guides may be found in such investment information sources as EMIS (a Euromoney Institutional Investor Company), The Economist, or market index makers (such as MSCI).

In an Opalesque.TV video, hedge fund manager Jonathan Binder discusses the current and future relevance of the term "emerging markets" in the financial world. Binder says that in the future investors will not necessarily think of the traditional classifications of "G10" (or G7) versus "emerging markets". Instead, people should look at the world as countries that are fiscally responsible and countries that are not. Whether that country is in Europe or in South America should make no difference, making the traditional "blocs" of categorization irrelevant. Guégan et al. (2014) also discuss the relevance of the terminology "emerging country" comparing the credit worthiness of so-called emerging countries to so-called developed countries. According to their analysis, depending on the criteria used, the term may not always be appropriate.[16]

The 10 Big Emerging Markets (BEM) economies are (alphabetically ordered): Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea and Turkey.[17] Egypt, Iran, Nigeria, Pakistan, Russia, Saudi Arabia,[18] Taiwan, and Thailand are other major emerging markets.

Newly industrialized countries are emerging markets whose economies have not yet reached developed status but have, in a macroeconomic sense, outpaced their developing counterparts.

Individual investors can invest in emerging markets by buying into emerging markets or global funds. If they want to pick single stocks or make their own bets they can do it either through ADRs (American depositor Receipts - stocks of foreign companies that trade on US stock exchanges) or through exchange traded funds (exchange traded funds or ETFs hold basket of stocks). The exchange traded funds can be focused on a particular country (e.g., China, India) or region (e.g., Asia-Pacific, Latin America).

Various sources list countries as "emerging economies" as indicated by the table below.

A few countries appear in every list (BRICS, Mexico, Turkey). Indonesia and Turkey are categorized with Mexico and Nigeria as part of the MINT economies. While there are no commonly agreed upon parameters on which the countries can be classified as "Emerging Economies", several firms have developed detailed methodologies to identify the top performing emerging economies every year[19]

Emerging Markets by Each Group of Analysts

Country	IMF[20]	BRICS+ Next Eleven	FTSE[21]	MSCI[22]	S&P[23]	EM bond index[24]	Dow Jones[23]	Russell[25]	Columbia University EMGP[26]
Argentina	Y			Y		Y			Y
Bangladesh	Y	Y				Y
Brazil	Y	Y	Y	Y	Y	Y	Y	Y	Y
Bulgaria	Y
Chile	Y		Y	Y	Y	Y	Y	Y	Y
China	Y	Y	Y	Y	Y	Y	Y	Y	Y
Colombia	Y		Y	Y	Y	Y	Y	Y	Y
Czech Republic			Y	Y	Y	Y	Y	Y
Egypt		Y	Y	Y	Y	Y	Y		Y
Greece			Y	Y	Y		Y	Y
Hungary	Y		Y	Y	Y	Y	Y	Y	Y
India	Y	Y	Y	Y	Y	Y	Y	Y	Y
Indonesia	Y	Y	Y	Y	Y	Y	Y	Y
Iran		Y
Israel						Y			Y
Kuwait			Y
Malaysia	Y		Y	Y	Y	Y	Y	Y
Mauritius									Y
Mexico	Y	Y	Y	Y	Y	Y	Y	Y	Y
Morocco	Y	Y	Y	Y	Y	Y	Y	Y	Y
Nigeria		Y				Y
Oman						Y
Pakistan	Y	Y	Y	Y	Y	Y
Peru	Y		Y	Y	Y	Y	Y	Y
Philippines	Y	Y	Y	Y	Y	Y	Y	Y	Y
Poland	Y			Y	Y	Y	Y		Y
Qatar			Y	Y	Y	Y	Y
Romania	Y					Y
Russia	Y	Y	Y	Y	Y	Y	Y	Y	Y
Saudi Arabia			Y	Y
South Africa	Y	Y	Y	Y	Y	Y	Y	Y	Y
South Korea		Y		Y					Y
Taiwan			Y	Y	Y	Y	Y	Y	Y
Thailand	Y		Y	Y	Y	Y	Y	Y	Y
Turkey	Y	Y	Y	Y	Y	Y	Y	Y	Y
Ukraine	Y					Y
United Arab Emirates			Y	Y	Y	Y	Y	Y	Y
Venezuela	Y					Y

In November 2010, BBVA Research introduced a new economic concept, to identify key emerging markets.[27] This classification is divided into two sets of developing economies.

As of March 2014, the groupings are as follows:

EAGLEs (emerging and growth-leading economies): Expected Incremental GDP in the next 10 years to be larger than the average of the G7 economies, excluding the US.

NEST: Expected Incremental GDP in the next decade to be lower than the average of the G6 economies (G7 excluding the US) but higher than Italy’s.

Other emerging markets[28]

The Emerging Market Bond Index Global (EMBI Global) by J.P. Morgan was the first comprehensive EM sovereign index in the market, after the EMBI+. It provides full coverage of the EM asset class with representative countries, investable instruments (sovereign and quasi-sovereign), and transparent rules. The EMBI Global includes only USD-denominated emerging markets sovereign bonds and uses a traditional, market capitalization weighted method for country allocation.[29] As of March end 2016, the EMBI Global's market capitalization was $692.3bn.[24]

For country inclusion, a country’s GNI per capita must be below the Index Income Ceiling (IIC) for three consecutive years to be eligible for inclusion to the EMBI Global. J.P. Morgan defines the Index Income Ceiling (IIC) as the GNI per capita level that is adjusted every year by the growth rate of the World GNI per capita, Atlas method (current US$), provided by the World Bank annually. An existing country may be considered for removal from the index if its GNI per capita is above the Index Income Ceiling (IIC) for three consecutive years as well as the country’s long term foreign currency sovereign credit rating (the available ratings from all three agencies: S&P, Moody’s & Fitch) is A-/A3/A- (inclusive) or above for three consecutive years.[29]

J.P. Morgan has introduced what is called an "Index Income Ceiling" (IIC), defined as the income level that is adjusted every year by the growth rate of the World GNI per capita, provided by the World Bank as "GNI per capita, Atlas method (current US$) annually". Once a country has GNI per capita below or above the IIC level for three consecutive years, the country eligibility will be determined.[29]

• J.P. Morgan has established the base IIC level in 1987 to match the World Bank High Income threshold at US$6,000 GNI per capita.
• Every year, growth in the World GNI per capita figure is applied to the IIC, establishing a new IIC that is dynamic over time.
• This approach ensures that J.P. Morgan's cutoff for index removal is adjusted by the World income growth rate, and not by the inflation rate of a smaller sample of Developed economies.
• This metric essentially incorporates real global growth, global inflation, and currency exchange rate (current USD-denominated) changes.
• Essentially, the introduction of the IIC establishes a higher, more appropriate threshold for country eligibility in the EMBI Global/Diversified.

The Emerging Markets Index by MasterCard is a list of the top 65 cities in emerging markets. The following countries had cities featured on the list (as of 2008): Countries with cities included in the Emerging Markets Index 2008 by Continent

Continent	Country
Asia	China
	India
	Indonesia
	Turkey
	Lebanon
	Malaysia
	Pakistan
	Philippines
	Thailand
	Vietnam
Africa	Egypt
	Kenya
	Morocco
	Nigeria
	Senegal
	South Africa
	Tunisia
Europe	Bulgaria
	Hungary
	Poland
	Romania
	Russia
	Ukraine
Latin America	Argentina
	Brazil
	Chile
	Colombia
	Dominican Republic
	Ecuador
	Mexico
	Peru
	Uruguay
	Venezuela

"Global Growth Generators", or 3G (countries), is an alternative classification determined by Citigroup analysts as being countries with the most promising growth prospects for 2010-2050. These consist of Indonesia, Egypt, seven other emerging countries, and two countries not previously listed before, specifically Iraq and Mongolia. There has been disagreement about the reclassification of these countries, among others, for the purpose of acronym creation as was seen with the BRICS.

Estimating the demand for products or services in emerging markets and developing economies can be complex and challenging for managers. These countries have unique commercial environments and may be limited in terms of reliable data, market research firms, and trained interviewers. Consumers in some of these countries may consider surveys an invasion of privacy.[30] Survey respondents may try to please researchers by telling them what they want to hear rather than providing honest answers to their questions. However some companies have dedicated their entire business units for understanding the dynamics of emerging markets owing to their peculiarity.[31]

The following table lists the 25 largest emerging economies by GDP (nominal) and GDP (PPP) in their respective peak year. Members of the G-20 major economies are in bold.

Rank	Country	GDP (nominal, Peak Year) millions of USD	Peak Year
1	China	14,216,503	2019
2	India	4,971,996	2019
3	Brazil	2,613,992	2011
4	Russia	2,289,244	2013
5	South Korea	1,656,674	2019
6	Mexico	1,314,569	2014
7	Indonesia	1,100,911	2019
8	Turkey	950,328	2013
9	Saudi Arabia	782,483	2018
10	Argentina	642,928	2017
11	Taiwan	601,431	2019
12	Poland	593,295	2019
13	Iran	577,214	2011
14	Nigeria	568,496	2014
15	Thailand	516,662	2019
16	United Arab Emirates	427,876	2019
17	South Africa	416,879	2011
18	Colombia	381,844	2013
19	Hong Kong	381,720	2019
20	Israel	381,569	2019
21	Malaysia	373,447	2019
22	Singapore	372,807	2019
23	Philippines	356,682	2019
24	Greece	356,140	2008
25	Venezuela	334,069	2011

Rank	Country	GDP (PPP, Peak Year) millions of USD	Peak Year
1	China	27,804,953	2020
2	India	11,321,280	2020
3	Russia	4,389,960	2019
4	Indonesia	3,778,134	2020
5	Brazil	3,480,546	2019
6	Mexico	2,616,289	2019
7	Turkey	2,361,778	2019
8	South Korea	2,320,498	2019
9	Saudi Arabia	1,900,894	2019
10	Iran	1,637,215	2017
11	Egypt	1,427,432	2020
12	Thailand	1,377,535	2019
13	Taiwan	1,339,812	2019
14	Poland	1,287,275	2019
15	Nigeria	1,215,389	2019
16	Pakistan	1,201,629	2019
17	Malaysia	1,076,373	2019
18	Philippines	1,040,413	2020
19	Vietnam	1,035,051	2020
20	Argentina	916,719	2017
21	Bangladesh	860,916	2020
22	South Africa	804,688	2019
23	Colombia	785,836	2019
24	United Arab Emirates	744,092	2019
25	Iraq	708,265	2019

• Next Eleven
• Emerging market debt
• Developed market
• Frontier markets
• North–South divide
• Tehran Stock Exchange
• Emerging and growth-leading economies
• BRIC
• BRICS
• Vladimir Kvint
• HKUST Institute for Emerging Market Studies
• Free trade area

• Goldman Sachs Paper No.134 BRIMC (in English)
• CIVETS countries - Colombia Official Investment Portal (in English)
• Michael Pettis, The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (2001) ISBN 0-19-514330-2
• Marc Lubaszka Emerging Market Funds and Technology

Look up emerging market in Wiktionary, the free dictionary.

• South Korea, Hong Kong, And Israel Are Emerging Markets, But Misclassified As Developed - Macro Affairs
• Emerging Markets Review Emerging Markets: A Review of Business and Legal Issues
• Emerging markets: leading the way to recovery Grant Thornton International Business Report
• Winning in Emerging Markets: Five Key Supply Chain Capabilities by Edgar E. Blanco. MIT Center for Transportation & Logistics.
• Investment Issues in Emerging Markets - Research Foundation of CFA Institute
• Emerging Europe - The latest news about emerging Europe