An Empirical Analysis on Industry Attractiveness in Emerging Markets and the Formation of Business Groups
This paper presents an empirical analysis of the most attractive industries in emerging markets at a static point in time (2007) based on evidence from the companies that have succeeded in them. We examined the World's 2,000 largest public companies in terms of profits, of which 428 were created and compete in emerging economies. We create an industry-attractiveness index based on industries growth rates and high profits ranks within countries. Our main aim in this study is to develop a methodology to detect attractive industries in emerging markets and particularly unstudied cases in which business groups contribute to that effect. We find that, excluding natural-resources-related firms, what seems to be the major attractive industries in almost half of the emerging economies are Banking and Telecommunications. Companies from these industries present strong group affiliation, competing simultaneously in these 2 major (and other) industries. Significant cases were found in which firm's strategic resources and political markets influenced industry forces, making attractive for competitors who possessed industry-firm strategic resources to join, but unattractive for other players