Globalization and Emerging Markets
Course Number 1151
Associate Professor Eric Werker
Fall; Q1Q2; 3 credits
Globalization and Emerging Markets is designed for students who will be investing, managing a business or nonprofit, or working for a government in an emerging or frontier market. The unit of analysis of the course ranges from countries to multinational and domestic companies in emerging markets. Students are asked to take the perspective of different decision-makers, such as politicians, investors, and managers. For instance, students may have to take the perspective of an analyst at an American company contemplating investment in Nigeria's power industry, a private equity investor in Brazilian tech, a large-cap mining firm in Mongolia, a domestic conglomerate in the Philippines, or a muckracking hedge fund in Russia. Many of the cases are set beyond the so-called BRICs of Brazil, Russia, India, and China, in today's "frontier" markets that are only beginning to attract the attention of mainstream investors. The course should appeal to anyone considering spending part of their career working or investing outside of the major developed markets.
The world order has changed significantly in the last two decades. The majority of economic growth is now occurring in non-high income democracies where some of the basic assumptions of markets (enforcement of contracts, anti-trust laws, government as referee not player) do not hold. These trends and characteristics provide a new set of opportunities for entrepreneurs and investors in the developed world and within emerging markets themselves. But they also introduce significant risk to those doing business in the developing world. GEM provides simple frameworks to understand the process of economic growth, to analyze the nuances between different emerging markets, to identify and learn how to deal with political risk, and to manage within a weaker or less formalized institutional environment. The course deals with macroeconomics, but focuses more on the unique political and institutional context in emerging and frontier markets. Therefore, GEM is not as intensively focused on macroeconomics as IMaGE and it does not deal with the range of global issues that are discussed in MITI.
Course Content and Organization
The course will focus on four interrelated modules that affect growth and business opportunities in emerging markets. First, we work through a framework to understand the process of economic growth and development, and in so doing develop the ability to analyze an emerging market at the level of the country. Second, we examine companies who need to understand this macro view in order to make cross-industry investment decisions. Third, we examine companies working within one or more industries and how they must manage political risk as well as develop strategies to overcome the institutional weaknesses of the environment. The final module looks at state-owned enterprises and their uniquely important influence both inside the emerging market and as they compete globally. The course uses a variety of country and company cases from 18 different emerging and frontier markets to accomplish these objectives. The cases range from country cases on some of the fastest-growing economies in the world to cases on mining, gas, banking, electricity, infrastructure, retail, technology, tourism, private equity, and hedge fund companies operating in emerging markets.
Other EC courses that complement this course:
Energy, MITI, IMaGE, and BBOP.