Institutional Voids in Emerging
Presented by :
Shamim Shakil (19202022)
Kaniz Fatema (19202024)
Hazera Rahman Jumu (19202025)
Imtiaj Ahmed (19202029)
Atiqur Rahman Arman (192022030)
an emerging market economy is the economy of a developing
nation that is becoming more engaged with global markets as it’s
Characteristics of emerging markets
• Strong economic growth
• High per capita income
• Liquid equity and debt market
• Accessibility by foreign investors
Institutions are the range of specialised intermediaries which
provide the needed information and contract enforcement
needed to document transactions.
the absence or underdevelopment of specialised intermediaries
such as database vendors, and quality certification firms,
regulatory corporations, and control-enforcing mechanisms
(Khanna & Palepu, 2010)'.
Different institutions in emerging markets
According to Khanna et al.,2015
• Product Market
• Labour Market
• Capital Market
• Political and Social System
• The availability of information- it is one of the major problems
in emerging market. This problem does not exist in developed
• Logistics and infrastructure- the ports and roads of emerging
economies are not as secure as the developed economies.
• Availability of skilled Labour - emerging markets have
less skilled human resource compared to the
developed markets. They also lose their skilled Labour
to the developed countries as they tend to migrate for
One of the main issues with the capital markets in
emerging economies is the lack of the information
availability to the capital providers.
Political and Social System
• Interference in business by local government- the
government might take protectionist measures by
implementing tariffs and quotes
• Political Instability - it puts negetqive impact on the
productivity, quality and relationships.
It refers to the attitudes of people towards the foreign
investors and their investments. They could either be
welcoming and friendly or be rude and strict.