Capital Rising: How Capital Flows Are Changing Business Systems All Over the World.

• Author: Marshall, Jeffrey
• Position: Brief article

Capital Rising: How Capital Flows Are Changing Business Systems All Over the World. By Peter S. Cohan and U. Srinivasa Rangan. Palgrave Macmillan, 268 pages. $35.

While capital markets and dealmaking in developed nations have been in a deep funk, the authors of Capital Rising write that they made a deliberate decision to focus on the future--and the continued flow of capital to these markets. As evidence, they cite a whopping 98-percent return in Latin America in 2009 in the MSCI Emerging Markets Index.

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They coin the term Entrepreneurial Ecosystem, and argue that capital flows to individual nations are shaped by their ecosystems, which are comprised of four key factors: Financial markets, corporate governance, human capital and intellectual property.

The authors write that if countries act to increase the sophistication of their financial markets and boost corporate governance standards, capital will flow toward those countries and away from those who...