What does business in the emerging markets teach us about the way we should run our own companies in the OECD countries? The emerging markets let us see the underlying factors that drive the way companies and industries evolve. In our study about Where Multinationals Should Locate in Emerging Markets -- we present the underlying fundamentals of supply and demand (without all the algebra). Similarly, shifts costs and benefits affect the location of manufacturing. In Bringing Manufacturing Home, I talk about the amounts of knowledge embedded in today's products. If companies are going "out", then at least they make stuff right at home. In our Investing in Emerging Market Infrastructure paper, we look at the places where investors can earn the greatest profits from investing in energy, transport, water and other infrastructure. Finally, in the last paper in the series, our Shadow Banking paper looks at opportunities for aspiring shadow bankers.
Perhaps my most recent innovation involves a new theory of retailing and "value webs" in emerging markets (a la CPALL).
In the old days, you could buys shares of AT&T (or bonds) and get a pay-back. Today, investment is far more complicated. My small area of this big subject has mostly looked at areas of interest to the large investment banks. In my article on Foreign Investment in the US, I find that investment bank quality (and marketing intensity) determine the extent to which a broker-dealer will succeed in attracting investment back on Wall Street. Such a theme repeats itself with my study of wealth management in emerging markets. In Middle Eastern Wealth Management (in contrast), growth in traditional banking will probably outstrip the wealth management industry.
Why does Big Law crush their rivals world-wide? What can we learn from them -- and what must they learn to compete in
a globalising world? In these papers, I look at the development of the legal profession. In my theory of compliance and lawyers, I look at demand for legal advisors to financial services firms. In our recent paper on Going Out, we look at the determinants of law firms' (and I-banks') competitiveness. We find a mix of "legal complexity externalities" and differentiation strategies. Interestingly, local law school quality plays a role -- even if finance faculty scores do not.
My recent chef d'oeuvre involves an analysis of China's economic fragility. What will it take to topple the Middle Kingdom? My paper on Brunei's experiment with the Wawasan 2035 represents perhaps the most quintessential publication on development. Tying economic and government budgeting decisions to a strategic plan has represented the holy grail of development theorists since the late 1940s. International trade has promoted the development of numerous economies. But what promotes the development of the customs services that regulate such trade? In our paper on institutional quality of customs agencies, we look at the triple headed hydra of anti-corruption, trade facilitation and institutional development. Just as customs agencies have (or have not) responded to development opportunities and risks, so have the wider governments they work in. In the Size and Structure of Government, we look at the way governments respond to changes in macroeconomics. Few can deny the role of competition in market development. Along these lines, we look at competition in Malaysian financial services as a way of assessing Malaysia's own market development.
Interlude -- CSR as a driver of development in Turkey
What does Hong Kong need to do to advance as an international financial centre? The city's corporate governance rules certainly reduce the potential volume of funds coming to her financial services firms. Also, complex challenges require a new regulatory structure. Such a Twin Peaks regulatory approach could help manage the many challenges which seep beyond any one type of financial services firm. We also show -- using solar energy finance as an example -- how financial centres should focus on their customers (rather than simply improving efficiency). Finally, the rule of law remains a hallmark measure of the competitiveness of an international financial centre. Hong Kong likely produces a "corruption externality" on the Mainland -- and we discuss what the ICAC can do to help fight corruption in China.
In case you want to see these publications as a list, see the annotated bibliography