Question

In: Economics

How/why do (a)population growth and (b)Infant mortality rates determine how a business might want to enter...

How/why do (a)population growth and (b)Infant mortality rates determine how a business might want to enter an international market?

Solutions

Expert Solution

Population growth is seen as increasing demand and infant mortality rate is seen as the standard of living.

Let's take the example of India. India has huge population growth so it is seen as a huge market for various firms in the world and they want to enter the Indian Market. But all these activities of MNC are related only to the place where the infant mortality is low, places like Delhi, Mumbai and other metropolitan areas.

In the Villages where the infant mortality is high, it is believed that the standard of living and purchasing power are low and these MNC never even think of entering those areas. India is a huge country where we can see such contrast but in the world, we can differentiate places like ASEAN countries and Sub Sahara Africa.  

ASEAN is growing in population and seen as a great potential market and Sub Saharan Africa is facing low standard of living and high mortality rates. These two are the proxy of knowing the wealth and demand potential of the country.


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