DGR : Dependent Governance Regime
Dependent Governance regimes are those where foreign direct investors dominate private capital allocation. They are located in developing economies.
Definition
Equity markets
The equity markets will be very small relative to GDP and a relatively high proportion of listed companies may be local subsidiaries of foreign-controlled companies.
Most of industrial and capital base controlled by foreign firms. Very low level of domestic accumulated savings
Broader economy
Challenges
and potential change factors
Companies, which are under the control of foreign portfolio or direct investors, are obvious targets for politicians in any sort of economic downturn and/or financial crisis. Both Hungary and Argentina are examples of countries with relatively high levels of foreign control over the corporate sectors, before governments have harnessed economic nationalism to claw back economic and financial powers
