Emerging market
An emerging market is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were in the past. The term "frontier market" is used for developing countries with smaller, riskier, or more illiquid capital markets than "emerging". As of 2025, the economies of China and India are considered the largest emerging markets. The ten largest emerging economies by nominal GDP are 4 of the 9 BRICS countries along with Mexico, South Korea, Indonesia, Turkey, Saudi Arabia, and Poland. The inclusion of South Korea, Poland, and sometimes Taiwan are debatable, given they are no longer considered emerging markets by the IMF and World Bank. If we exclude South Korea, Poland and/or Taiwan, this list of top ten emerging markets would include Argentina and Thailand.
Emerging market economies' share of global PPP-adjusted GDP has risen from 27 percent in 1960 to around 53 percent by 2013.
When countries "graduate" from their emerging status, they are referred to as emerged markets, emerged economies or emerged countries, where countries have developed from emerging economy status, but have yet to reach the technological and economic development of developed countries. According to a 2008 article in The Economist, many people find the term "emerging markets" outdated, but no alternate term has gained wide use. Emerging market hedge fund capital reached a record new level in the first quarter of 2011 of $121 billion.
Terminology
In the 1970s, "less developed countries" was the common term for markets that were less "developed" than the developed countries such as the United States, Japan, and those in Western Europe. These markets were supposed to provide greater potential for profit but also more risk from various factors like patent infringement. This term was replaced by emerging market. The term is misleading in that there is no guarantee that a country will move from "less developed" to "more developed"; although that is the general trend in the world, countries can also move from "more developed" to "less developed".Originally coined in 1981 by then World Bank economist Antoine Van Agtmael, the term is sometimes loosely used as a replacement for emerging economies, but really signifies a business phenomenon that is not fully described or constrained by such; these countries are considered to be in a transitional phase between developing and developed status. Examples of emerging markets include many countries in Africa, most countries in Eastern Europe, some countries of Latin America, some countries in the Middle East, Russia and some countries in Southeast Asia. Emphasizing the fluid nature of the category, political scientist Ian Bremmer defines an emerging market as "a country where politics matters at least as much as economics to the markets".
The research on emerging markets is diffused within management literature. While researchers such as George Haley, Vladimir Kvint, Hernando de Soto, Usha Haley, and several professors from Harvard Business School and Yale School of Management have described activity in countries such as India and China, how a market emerges is now well understood and can easily be modeled.
In 2009, Kvint published this definition: "an emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM, an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions"
In 2008 Emerging Economy Report, the Center for Knowledge Societies defines emerging economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization". It appears that emerging markets lie at the intersection of non-traditional user behavior, the rise of new user groups and community adoption of products and services, and innovations in product technologies and platforms.
More critical scholars have also studied key emerging markets like Mexico and Turkey. Thomas Marois argues that financial imperatives have become much more significant and has developed the idea of 'emerging finance capitalism' – an era wherein the collective interests of financial capital principally shape the logical options and choices of government and state elites over and above those of labor and popular classes.
Julien Vercueil recently proposed an pragmatic definition of the "emerging economies", as distinguished from "emerging markets" coined by an approach heavily influenced by financial criteria. According to his definition, an emerging economy displays the following characteristics:
- Intermediate income: its PPP per capita income is comprised between 10% and 75% of the average EU per capita income.
- Catching-up growth: during at least the last decade, it has experienced a brisk economic growth that has narrowed the income gap with advanced economies.
- Institutional transformations and economic opening: during the same period, it has undertaken profound institutional transformations which contributed to integrate it more deeply into the world economy. Hence, emerging economies appears to be a by-product of the current globalization.
The term "rapidly developing economies" is being used to denote emerging markets such as The United Arab Emirates, Chile and Malaysia that are undergoing rapid growth.
In recent years, new terms have emerged to describe the largest developing countries such as BRIC, along with BRICET, BRICS, BRICM, MINT, Next Eleven and CIVETS. These countries do not share any common agenda, but some experts believe that they are enjoying an increasing role in the world economy and on political platforms.
Lists of emerging markets vary; guides may be found in such investment information sources as EMIS, The Economist, or market index makers.
In an Opalesque.TV video, hedge fund manager Jonathan Binder discusses the current and future relevance of the term "emerging markets" in the financial world. Binder says that in the future investors will not necessarily think of the traditional classifications of "G10" versus "emerging markets". Instead, people should look at the world as countries that are fiscally responsible and countries that are not. Whether that country is in Europe or in South America should make no difference, making the traditional "blocs" of categorization irrelevant. Guégan et al. also discuss the relevance of the terminology "emerging country" comparing the credit worthiness of so-called emerging countries to so-called developed countries. According to their analysis, depending on the criteria used, the term may not always be appropriate.
The 10 Big Emerging Markets economies are : Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea and Turkey. Egypt, Iran, Nigeria, Pakistan, Russia, Saudi Arabia, Taiwan, and Thailand are other major emerging markets.
Newly industrialized countries are emerging markets whose economies have not yet reached developed status but have, in a macroeconomic sense, outpaced their developing counterparts.
Investing in emerging markets dates back to at least the mid-1800s, with the establishment of Foreign and Colonial Investment Trust which still trades on the London Stock Exchange under the symbol FCIT as of 2014. While European stocks dominated the globe when measured by market capitalization and the British Empire was the leading international superpower, FCIT invested heavily in North and South America which then largely qualified as emerging markets. English economist John Maynard Keynes also was a pioneer of emerging markets investing from the 1930s, while John Templeton in the 1950s and '60s was one of the earliest American investors to devote significant attention to emerging market stocks. Individual investors today can invest in emerging markets by buying into emerging markets or global funds. If they want to pick single stocks or make their own bets they can do it either through ADRs or through exchange traded funds. The exchange traded funds can be focused on a particular country or region.
Emerged market
Also referred to as "emerged economy" or "emerged country".Emerging markets share the economic characteristics such as low income, high growth economies that use market liberalization as their main means of growth. Of course, emerging economies can develop out of such emerging status, entering the post-emerging stage. When emerging markets are promoted from their economic status, they are referred to as emerged markets. Countries like Israel, Poland, South Korea, Taiwan, the Czech Republic, and city-states such as Singapore have transitioned from emerging to "emerged". These emerged markets tend to be characterized by higher incomes and relatively stable political schemes, compared to those categorized as emerging markets.
Commonly listed countries
Various sources list countries as "emerging economies" as indicated by the table below.A few countries appear in every list. Indonesia and Turkey are categorized with Mexico and Nigeria as part of the MINT economies. While there are no commonly agreed upon parameters on which the countries can be classified as "Emerging Economies", several firms have developed detailed methodologies to identify the top performing emerging economies every year. While often treated as one group, emerging market economies are diverse in their factor endowments as well as real, financial, and external linkages. Beyond their levels of financial integration and overall economic development, the size of each market also matters because smaller markets may be considered less favorable investment targets.
| Country | IMF | BRICS | Next Eleven | FTSE | MSCI | S&P | JPM EM bond index | Dow Jones | Russell | Columbia University EMGP | Cornell University EMI E20+1 |
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