Operating in Emerging Markets: A Guide to Management and Strategy in the New International Economy

5. Managing Risk

Introduction

The previous chapter presented the first two steps in assessing emerging markets as potential business locations, starting with identifying the Determinants of Attractiveness, or the reasons for investing in a given emerging market, and then introducing the Four Dimensions to help us define the context in which investors may operate. We have considered risk in passing, and we turn now to look at the concept and implications of “risk” in greater detail. Emerging markets are, on average, less transparent, more economically volatile, less certain in their rules and institutions, and more prone to conflict than developed economies. They have tended to be the theatres of almost all recent armed conflicts, whether in ...