This term refers to the markets of countries that are at an early stage of their development, relative to the mature markets of countries like the United States or Japan. Emerging markets are typically much smaller than their developed counterparts and such markets tend to be less well established than mainstream markets, often with less comprehensive regulations around how companies and investors can operate.
Emerging markets include countries in Latin America such as Mexico and Argentina, the Far East, including India and South Korea, and European nations such as Turkey and Poland. However, the world’s biggest emerging markets, Brazil, Russia, India and China, are now playing an increasingly important role in the global economy, with this group of four powerful developing economies sometimes referred to as the BRIC countries.
Emerging markets are generally regarded as bringing higher risk for investors than developed markets, though this needs to be seen in the context of their higher potential rewards. Though emerging markets have traditionally relied heavily on manufactured goods for exports to more developed countries, signs have emerged in recent years that domestic consumers are becoming increasingly important contributors to the success of companies in countries such as Brazil and China.Best Practice
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