Question

What empirical measure can we adopt for esimating basic and non basic industries? ( at least one paper)

Answer 1

Basic industries are made up of small and large businesses that sell mainly to external customers while Non basic industries are made up of primarily small businesses that sell to local customers, including basic and non-basic businesses.

Non basic industries actually support basic industries. Because export and import flows are generally not tracked at the sub-national level, it is impossible to study industrial production and trade flows in and out of an area. That is why, basic and non basic concepts are driven by employment data. Examples of basic businesses include large manufacturing and mining companies, and non basic businesses include engineers, service firms, and convenience stores.

Basic businesses are key to economic growth because they generate revenue from outside customers and support non basic businesses. Economic power affects employment, government budgets, private sector investments and urban planning. For example, a country with only non basic industries is more likely to experience the effects of recessions in employment and population.