As markets or production bases, China and India are becoming important and integral players in the global economy. Foreign direct investment (FDI), portfolio investments and outsourcing businesses have increased dramatically in these two economies. Despite the rising importance of these two economies on the world stage, our knowledge and analysis of these two countries in an integrated manner has remained poor. The two are often lumped together by business analysts as "emerging markets," despite the substantial differences in their political systems, reform policies and business organizations. Academics, in contrast, have tended to treat the two countries separately, preferring to specialize in issues and questions specific to one or the other country.

The purpose of this course is to analyze these two countries within a coherent analytical framework. Our learning model is inductive, and heavily based on class discussions and participation. The group projects should aim at integrating analysis, knowledge and understanding of these two countries. We will also experiment with other forms of group projects, such as creating and working on business plans and those projects that integrate research from field trips with more traditional research, such as library research. There is no prerequisite but 15.012 (Applied Macro- and International Economics) and 15.223 (Global Markets, National Policies and the Competitive Advantage of Firms) are highly recommended.

Syllabus

Course Description

Increasingly, as markets or production bases, China and India are becoming important and integral players in the global economy. Foreign direct investment (FDI), portfolio investments and outsourcing businesses have increased dramatically in these two economies.

Despite the rising importance of these two economies on the world stage, our knowledge and analysis of these two countries in an integrated manner has remained poor. On the one hand, analysts in the business community tend to lump the two countries together as a part of a homogenous group known as "emerging markets". This is so despite the substantial differences in their political systems, reform policies and business organizations. Academics have tended to treat the two countries separately, preferring to specialize in issues and questions specific to one or the other country.

This is an experimental course, and its purpose is to bring these two countries together in an attempt to come up with a coherent framework which we can use to analyze these two countries. It should be acknowledged explicitly and upfront that there is a lot we do not know in terms of how to do this. It is heavily incumbent on the students in the course to provide perspectives, facts and viewpoints that will contribute to this effort. The course is designed to facilitate this effort. Our learning model is inductive, rather than deductive, and it is heavily based on class discussions and participation. The group projects should aim at integrating analysis, knowledge and understanding of these two countries.

We start with "macro" perspectives on these two countries and then move to industry/firm-level analyses. The idea is to analyze the decisions and performance of firms in the greater political and economic contexts in which they operate. This is the emphasis of this course, i.e., we study the interface between firms and their business environments rather than assuming that business decisions are only driven by dynamics internal in a firm.

We grapple with three broad questions in this course. (1) What are the essential features of the political and economic contexts for businesses in these two countries? (2) How have these contextual features shaped the performance and competitiveness of firms in them? (3) If one were to draw up a balance sheet of these two economies, what would it look like? In between, we have many specific questions and issues to address, such as the role of FDI in economic development, the growth and development of entrepreneurship, and the effect of globalization on local firms.

Requirements

The requirements for the course and the contribution of each towards the final grade are as follows:

Class Participation

Your active participation in the discussion in class is integral to the design of this course. Prior preparation of the cases and assigned readings under required readings are essential as your familiarity with the required readings is presumed in the lectures and case discussions. It should be noted and stressed that a significant portion of your grade—40%—depends on your class participation. Students should be prepared and accept to be "cold-called," i.e., being called to participate without volunteering to participate.

Only the required readings will be discussed in class.

For each class, I have provided a number of discussion questions. These are suggested questions to help you think about the issues that may arise in the course of class discussions. They may not be mechanically followed during the class discussions. Because we value exchange of ideas as an effective way of learning, we encourage debates among students and expressions of your own views.

Calendar

Course calendar.

SES #	TOPICS
Part I: An overview
1	Introduction to the course
2	The macro perspective: China and India
3	Financing environment
4	Business environment
Part II: Entrepreneurial dynamics
5	Legend (Lenovo)
6	Infosys
7	Venture capital and private equity
8	Diaspora in China and India
Part III: Foreign direct investment (FDI) controversies
9	FDI opening
10	Intellectual property rights (IPR) and pharmaceutical industry in India
11	Multinational corporations (MNCs) and local competition
12	Bottom of the pyramid dynamics in India
13	Debating development models