What is an Emerging Market?

By A. Mody. Social Science Research Network, 2004

140 citations recorded by the source corpus.

As developing economies become richer, they seek to contract with the global economy in increasingly complex ways. Dealing with that complexity often implies the need to renegotiate contracts. However, such recontracting is viewed with concern, particularly by market participants. At the same time, iron-clad commitments to abstain from recontracting are untenable. Sovereign debt experts have long dealt with this dilemma. This paper argues that the acute trade-off between commitment and flexibility is not unique to sovereign debt. Instead, it is the defining characteristic of an emerging market. Examples of World Bank guarantees on behalf of sovereign governments to private lenders, exchange rate regimes, and international bond contracts, highlight the evolution from commitment to flexibility. Early interaction with international markets typically benefits from strong transaction-specific commitment. However, the goal is to grow out of transactional commitments to achieve commitment through credible institutions. Institutional commitment allows the benefits of flexibility, with the country`s "word" acting as the necessary assurance to behave responsibly.

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Citations in the corpus

Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets (2019, background): “regulations (Mody, 2004), these countries are characterized by cumbersome regulatory business procedures (Meyer et al.”
Can Bitcoin be a diversifier, hedge or safe haven tool? (2019, background): “The decentralized and independent nature of Bitcoin, on the other hand, gives Bitcoin the relative advantage over financial assets in gaining the trust from investors (Krause, 2016; Lunn, 2014).”
Do political connections matter for firm innovation? Evidence from emerging markets in Central Asia and Eastern Europe (2020, unknown): “While most literature focuses on BRIC countries (BrazilRussia-India-China) to showcase the idiosyncrasies of emerging markets (Mody, 2004) and innovation in these contexts (Agarwal, Brem and Grotke, 2018; Wan, Williamson and Yin, 2019), this set of countries is of particular relevance for our…”
How WEIRD are positive psychology interventions? A bibliometric analysis of randomized controlled trials on the science of well-being (2018, background): “Countries classified as emerging/developing economies are markets with high growth expectations, characterized by a high level of risk and extremely volatility (Mody, 2004).”