Question

1) What is greenfield FDI?

2) What is the non-basic sector?

3.There are three types of industrial structure or organization: monopoly, oligopoly, and perfect competition. Of those three, the Lösch location model is associated with __________. Of those three, the Weber location model is associated with __________.

4.How do the locational requirements/preferences differ between producer services providers and consumer services providers?

5.What are the three components of growth in shift-share analysis?

6.Compare Reilly’s Law of Retail Gravitation to Huff’s Competing Destinations model.

Answer 1

1) Greenfield investment- it is a type of foreign direct investment where a parent company build its operation in a new market from scratch. This type of investment is completely different from other forms of investments such as acquisitions and buying a percentage of equity shares to get rights to management.

It involves a high cost for the company as the company will have to build everything but it gives them the highest control as the company will build the project according to its own standards.They are often set up in countries which gives them highest benefits in terms of subsidies and tax breaks which increases the revenue of the company.

2) Non basic sector- non basic sector is a industry type and it consists of many small businesses that sell their products to the local customers which includes basic as well as non basic businesses.It is different from basic sector as basic sector sell its products to the external customers.Example small consulting companies,stores and service companies which serves the basic sector.

It primarily functions as a support industry selling its services to the basic sector. Another example would be the model and pattern making shops in a region that supports the local automobile industry,which in turn dominates the market and export cars to other markets.