As the title suggests, the publication analyzes the nature of institutional voids in emerging markets through information obtained through research and discussions of the findings obtained. Observations presented in the book suggest that the creation of physical infrastructure is substantial for the development of emerging markets. Also, institutional development is important for emerging markets although it has not been recognized for a while. The book gives different examples that demonstrate the importance of well-developed market infrastructure. For instance, George Akerlof’s example is used to present the impact of the development in the emerging markets (Khanna & Palepu, 2010).
Also, the book presents a comparison of transaction costs in developed and emerging markets. Information asymmetry is presented in the context presenting the significance of the knowledge about goods and services presented in the market by the buyers. The book presents the significance of bargaining power in the market. “Bargaining leaves most market participants unsatisfied.” The book suggests that the information and the knowledge about the product, a car as presented as an example, are responsible for mutual satisfaction between different aspects in the market (Khanna & Palepu, 2010).
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Additionally, the book presents several facts on how developed market work. Institutional development is evident in developed markets since such markets would have institutions that are equivalent to the products presented in the market. In support of the same, the book suggests that products in developed markets depend comprehensively on a network of hard and soft infrastructure. Furthermore, the book presents different categories of markets and the best strategies that are necessary for emerging markets. Educational institutions are presented under the category of labor markets since they help in the development of human capital and certify their quality as well (Khanna & Palepu, 2010). Under capital markets, accounting standards and information intermediaries are necessary for emerging markets (Love & Klapper, 2002). Lastly, the book presents a structural definition of emerging markets that give an overall demonstration of the important aspects that differentiate it from developed markets.
References
Khanna, T., & Palepu, K. G. (2010). The nature of institutional voids in emerging markets. T. Khanna &K. G. Palepu (eds), Winning in Emerging Markets: A Road Map for Strategy and Execution , 13-26.
Love, I., & Klapper, L. F. (2002). Corporate governance, investor protection, and performance in emerging markets . The World Bank.
