Can one accept the decoupling of the emergent countries when compared to the growth of the rest of the world?
- The internal analysis of Michelin
- The ethics of Michelin.
- Competitive financial, technical and commercial aspects
- Portfolio of products and 4Ps of Michelin
- Strengths / Weaknesses of Michelin
- The external analysis of Michelin
- Microenvironment: Michelin's partners
- Market opportunities and threats by the PESTEL method
- Competitive analysis and Porter's five forces
- SWOT analysis
- Strategic decisions undertaken by Michelin on SBA
- Passenger Vehicles
- Heavy Load
- Specialty tires
- Other group activities
The most influential emerging markets since 2000 are designated by the acronym BRIC (Brazil, Russia, India and China). Along with having common characteristics, they are the biggest countries of emergence and are now knocking the global economic order. The issue of decoupling of these countries with the rest of the world, has, since then, raised the annual growth of the latter. In 2002, it reached about 7% while that of developed countries amounted to only 2-3%. But the previous crises and recent data show that growth in emerging markets tends to decline when the developed world slows down, illustrating the belief that when the US economy sneezes, the rest of the planet catches a cold. Thus, the question arises whether global business cycles are converging, or emerging countries have managed to decouple from fluctuations in business cycles of the developed countries and can be independent countries of global growth.
Thus, if it could be believed in some form of decoupling of emerging markets is relative to the global growth during periods of economic calm, the current crisis reveals the many correlations making all economies interdependent . Theories of coupling or uncoupling would in fact be at the origin of vicious or virtuous circles: the effects of coupling is giving emerging countries the means to independence, belief in decoupling leading to portfolio diversification and thus strengthening the coupling phenomena.
The belief in a process of decoupling of emerging markets being relative to world growth would mean that they themselves have become engines of growth and suggests that changes in the United States and other industrialized countries would have lower impact in the world. Indeed, the growth of the emerging global business cycle would be partially immune to downturns (and expansion) in industrialized countries.
A study by M. Ayhan Kose, C. Otrok and E. Prasad addresses the issue of whether the international economic fluctuations tend to converge or diverge. By analyzing the fluctuations of three macroeconomic variables: production, consumption, investment, they compared the impact of global factors and three specific groups of countries:industrialized countries, emerging countries, developing countries.
The common factors explain a significant proportion of cyclical fluctuations in the world. They are responsible for about 17% of output fluctuations, 12% of consumption and 11% of the investment on average.The importance of common factors in explaining business cycles implies there is a "world business cycle." However, it is interesting to note that the assumption of a convergence of cycles implies that the weight of the global factor should increase over time, while the decoupling theory implies that it must be decreasing. It is observed that the relative influence of the global factor of cyclical fluctuations decreased in emerging markets where it goes from 13% to 4%.
In 2008, the growth rates of emerging countries showed their large consumer markets: Brazil: 3.7%, Russia 8.1%, India: 9% and China11%. These growth rates are obviously to be analyzed by comparing the share of exports and domestic demand. It is observed that India and Brazil have very low GDP that is dependent on their exports.
Tags: emerging countries; Brazil, Russia, India and China (BRIC); decoupling of emerging markets; business cycles of developed countries