This paper explores the characteristics that we tend to associate with emerging economies that are important considerations especially for foreign investors. The paper is particularly integrated for those who are studying international business and more specifically, those that want to research on investment.
Heakal (2010) defines emerging market economy as an economy with a low to middle income based on the per capita income. 80% of the global population and 20% of the economy of the world is born by the countries holding these markets. He borrows this definition from Antoine Van Agtmael of the International Finance Corporation of the World Bank, the definition which he crafted in 1981. He observes that the term emerging market is developed from the notion that these countries have shown fast-growing economies and have for some time now embarked on the development and reform agenda. Countries under this category might have differences in their political, social economic structure, but they constitute the emerging markets because they have resorted to opening up their markets and in a way, they have emerged onto the global economic landscape. The countries in question have adopted an open market economic program that calls for their transparency and accountability in all its dealings. It has built a stable local currency, which attracts investor confidence and the confidence of the Breton Woods institutions such as World Band and International Monetary Fund for economic aid and economic guidance.
Accordingly, he observes that before an emerging market economy starts to attract foreign investment, its economic growth must be indicative of an upward trend. This must be sustained by first local investment, so that it attracts foreign investment. Foreign investment is a sure indicator that an emerging market has been noticed. This opens for the constant flow of international capital in