Globalization and Emerging Markets
Course Number 1151
Associate Professor Aldo Musacchio
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 market. The unit of analysis of the course ranges from countries to multinational and domestic companies in emerging markets. Therefore, 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 the manager of an American company operating abroad, of an investor in Dubai bonds, of a shareholder in Brazil's oil company Petrobras, the manager of Indian Railways, or chairman of the central bank of China. As such the course should appeal to anyone considering a career in emerging markets or who will be doing business or investing in emerging markets.
The world order has changed significantly in the last two decades. The influence of western-style varieties of capitalism has been challenged by new forms of capitalism that rely less on private enterprise and on the enforcement of rigid institutional structures (e.g., laws). This change is to a large extent explained because of the rise of emerging markets to the center stage of global capitalism. Large economies such as Brazil, Russia, India, and China (BRIC) dominate some of the most important commodity markets and are growing and industrializing at a faster pace than any developed country. These trends provide a new set of opportunities for entrepreneurs and investors in the developed world and within emerging markets themselves. GEM provides a simple framework to understand the process of economic growth, to identify and learn how to deal with political risk, and finally to distinguish new trends that can provide sustainable business opportunities in emerging markets. The course deals with macroeconomics, but focuses more on the unique political and institutional context in emerging markets. Therefore, GEM is not as intensively focused on macroeconomics as IMaGE or Global Capital and National Institutions 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, the course provides a basic framework to understand the process of economic growth. Second, the course looks at the dominance of countries and companies from emerging markets in commodities and looks at whether reliance on commodity exports can generate a sustainable development strategy at the company and country level. Third, the course examines the challenges that political risk in emerging markets poses and the strategies companies can take to overcome some of those institutional weaknesses. The final module looks at the rise of governments and state-owned enterprises as the dominant players in the global economy. We will look at the challenges state-owned companies face to become efficient and the risks investors face when buying equity or debt issued by these companies. The course uses a variety of country and company cases to accomplish these objectives. The course cases range from country cases on BRIC economies, Dubai, and others, to cases on oil, mining, entertainment, and luxury goods companies operating in emerging markets.
Other EC courses that complement this course:
Energy, Entrepreneurship and Global Capitalism, MITI