Global Firms and Emerging Markets in an Age of Anxiety

Anxious Resilience

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The terrorist attacks of September 11, , ushered in an age of anxiety along with the new century, an anxiety that has affected the international business. Global Firms and Emerging Markets in an Age of Anxiety. by S. Benjamin Prasad, ed., Pervez N. Ghauri, ed. Illuminates the challenges faced by global firms.

Of course, there have always been emerging markets. The early post-war period saw the emergence of Japan from total devastation to a vibrant, high growth economy - the prototype the modern emerging market. The globalization tsunami washed over places where markets had long been absent.

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In communist China, doctrine from Mao Zedong's "Little Red Book," a book of quotations from Zedong that was distributed among communist party members, gave way to a new more capitalist maxim that, "To Get Rich is Glorious. Portfolio and direct investment capital from the developed markets of North America, Europe and an "emerged" Japan raced around the globe in search of the next can't-miss opportunity. Much of this capital, particularly the portfolio money, was not in it for the long-term but ready to repatriate to the home country when times got tough, such as in Thailand in and Russia in Dawn of Global Capitalization This brings us to the third phase of global market evolution, the "age of global capitalization.

It's about countries and regions mobilizing their own capital sources from increasingly wealthy business and consumer populations.

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In other words, capital locations are becoming more closely correlated with manufacturing, service and consumer locations. Around the world, new capital markets reflect both standards of global best practices and local flavor. Poland's pension investment system, the tech-heavy Tel Aviv Stock Exchange and the Ukrainian corporate bond market are all distinct local markets with rapidly evolving legal, regulatory and procedural standards.

Increasingly, what happens on these markets is not driven primarily by flavor-of-the-day decisions in London or New York, but rather the strategic actions of large companies in Russia, Brazil or China for example on the world stage. Risk and Return If the lines between developed and emerging markets are blurring, we would expect to see evidence of this in risk-return profiles.

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Simply put, the traditional rationale for investing in emerging markets has been to dedicate a portion of a portfolio to assuming increased risk in pursuit of higher potential returns. One implication of global capitalization is that the risk-return boundaries would become less sharply delineated.

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The following chart provides an illustration of this. Described as a feeling of unease, worry or fear it is, argue some, a feature of the human condition. Alain de Botton, the author of Status Anxiety says: Though we may focus day-to-day on this or that particular worry creating static in our minds, what we are really up against is anxiety as a permanent feature of life. Yet most of us will probably find our unwelcome thoughts and feelings are triggered by an external stressor such as an interview or presentation.

And while anxiety can be helpful — on occasions improving our performance, making us check our work, or prepare thoroughly for an interview — if untreated it can be destructive.

For the person experiencing stress or anxiety the feelings may feel indistinct. Yet there is a difference between the two. Stress can trigger anxiety. For some people anxiety becomes part of their daily life, requiring management over years.

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Others are able to return to their jobs and withstand the same pressure that triggered their acute anxiety in the first place. John Binns, a former Deloitte partner who now advises on mental health issues, says: The Financial Times covers, comments and analyses the latest UK and international business, finance, economic and political news.

The views expressed in this article are those of the author alone and not the World Economic Forum. Workforce and Employment How to tackle anxiety at work.

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