An article from Foreign Policy suggests of a strong correlation between the existence and growth of Wal-Mart Stores and national economic growth.
This from Foreign Policy (all bold highlights mine)
``When India's first Wal-Mart opened this summer in Amritsar, the response was mixed, with detractors fearing that big-box stores would eventually crowd out India's fabled "wallah" culture. What no one remarked on, however, was that Wal-Mart's debut in a country is a bellwether for future growth. Indeed, Wal-Mart has started operations in 15 countries since 1991, and 13 of them have had boom economies, with an average of 4.4 percent annual growth since Wal-Mart arrived. Over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average.
``So what's going on? Does the ability to buy giant bags of Froot Loops at cut-rate prices inspire economic growth? More likely, Wal-Mart is simply a smart, cautious investor. "Wal-Mart chooses to go places with a sizable middle class," says Nelson Lichtenstein, a historian who just published a book on Wal-Mart's rise. And Wal-Mart's attention to middle-class growth could pay off for the company in the future.
``The portion of the global middle class that lives in the developing world should rise from 56 percent in 2000 to 93 percent in 2030, according to the World Bank. Next up for the Wal-Mart effect, Lichtenstein says: Russia and Eastern Europe. Picture the new global bourgeoisie outfitted with cheap hibachi grills, extra-durable puppy toys, and energy-efficient minifridges, and you've got a glimpse of the coming Wal-Mart revolution."
Additional comments:
The article focuses mostly on the demand side perspective: global middle class growth.
Here is our complimentary view from the supply side:
Since Wal-mart offers international products at the most affordable prices, this indicates that consumers have more options to choose from, and is likewise backed by greater purchasing power from competitive pricing, i.e. more products that can be bought.
Since Wal-mart offers its consumers access to the world products, this also implies that global competition enhances pricing, product quality and the pool of products available for sale.
This also means an expanded internationalization of trade.
In short, the Wal-mart effect can be construed as representative of the globalization dynamics. (Hat tip: Mark Perry)
This from Foreign Policy (all bold highlights mine)``When India's first Wal-Mart opened this summer in Amritsar, the response was mixed, with detractors fearing that big-box stores would eventually crowd out India's fabled "wallah" culture. What no one remarked on, however, was that Wal-Mart's debut in a country is a bellwether for future growth. Indeed, Wal-Mart has started operations in 15 countries since 1991, and 13 of them have had boom economies, with an average of 4.4 percent annual growth since Wal-Mart arrived. Over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average.
``So what's going on? Does the ability to buy giant bags of Froot Loops at cut-rate prices inspire economic growth? More likely, Wal-Mart is simply a smart, cautious investor. "Wal-Mart chooses to go places with a sizable middle class," says Nelson Lichtenstein, a historian who just published a book on Wal-Mart's rise. And Wal-Mart's attention to middle-class growth could pay off for the company in the future.
``The portion of the global middle class that lives in the developing world should rise from 56 percent in 2000 to 93 percent in 2030, according to the World Bank. Next up for the Wal-Mart effect, Lichtenstein says: Russia and Eastern Europe. Picture the new global bourgeoisie outfitted with cheap hibachi grills, extra-durable puppy toys, and energy-efficient minifridges, and you've got a glimpse of the coming Wal-Mart revolution."
Additional comments:
The article focuses mostly on the demand side perspective: global middle class growth.
Here is our complimentary view from the supply side:
Since Wal-mart offers international products at the most affordable prices, this indicates that consumers have more options to choose from, and is likewise backed by greater purchasing power from competitive pricing, i.e. more products that can be bought.
Since Wal-mart offers its consumers access to the world products, this also implies that global competition enhances pricing, product quality and the pool of products available for sale.
This also means an expanded internationalization of trade.
In short, the Wal-mart effect can be construed as representative of the globalization dynamics. (Hat tip: Mark Perry)
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