Abstract
The notion of an emerging, or developing, market economy appeared 1981 in a World Bank report. This term was used since emerging countries have embarked on economic development and reform programs, and have begun to open up their markets and "emerge" onto the global scene. Therefore emerging markets are fast growing economies and benefit from the globalization of the world market. Emerging markets, especially the "giants" such as China, India, Russia, Mexico and Brazil are changing the face of global economics and politics. Today, roughly thirty countries are considered to be in transition to higher levels of economic development and have hence earned the title "emerging markets" from the International Finance Corporation (IFC) of the World Bank. Companies are increasingly looking to emerging markets as a vital source of growth, both for outsourcing and competing. But these new opportunities are also a source of danger for the industrialized world's company in case of a bad understanding of institutional variations. Because these markets are in transition and hence not stable, investing in Emerging Markets Economies (EME) adds considerable risk to a company's portfolio.
