Firms with significant expertise, brands, patents, copyrights, and proprietary technologies seek to grow by exploiting these advantages in emerging markets.
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Excess capacity in many industries often drives M&A activity as firms strive to achieve greater economies of scale and scope, as well as pricing power with customers and suppliers.
Firms investing in industries or countries whose economic cycles are highly correlated may lower the overall volatility in their consolidated earnings and cash flows.
Investors in segmented markets will bear a lower level of risk by holding a disproportionately large share of their investments in their local market as opposed to the level of risk if they invested in a globally diversified portfolio.
Arbitrage should drive the prices in different markets to be the same, as investors sell those assets that are undervalued to buy those that are overvalued.