In my country there are very few manufacturing factories,but large numbers of small retail shops (like one shop per house or may be even more). What are the effects in the economy of a country for having large numbers of retail shops,but very few manufacturing factories ?

  • $\begingroup$ This is a sign of a consumption driven economy (or consumer economy). There is a vast wealth of literature on consumer economies, so I would suggest leafing through it if you are interested! $\endgroup$ – DornerA Jun 21 '16 at 13:37
  • $\begingroup$ @NisH I think you mean factories, not industries. $\endgroup$ – Giskard Jun 21 '16 at 13:40
  • $\begingroup$ @DornerA How long a country can survive in this kind of consumer economy? I mean, can a country's economy (or income) solely depend on its retail industry, and not involve in any manufacturing activity? $\endgroup$ – NisH Jun 22 '16 at 6:26
  • $\begingroup$ @denesp Yeah, I mean not many factories and also manufacturing industry is in nascent stage. $\endgroup$ – NisH Jun 22 '16 at 6:31

Economists are generally more interested in the aggregate output of different sectors of the economy rather than the number of firms or outlets. The difference between lots of small shops and a few large shops is quite different to the difference between the majority of GDP coming from industry or services.

If a country has a lot of small retail outlets and a few large manufacturing firms, that suggests that there are much larger economies of scale in manufacturing than retail.

The aggregate output of agriculture, industry and services are normally reported in GDP tables (here's an example for Rwanda).

A larger services sector is normally associated with richer, more advanced countries. These images compare countries based on the relative size of industry, services and agriculture, and the proportion of the labour force working in each:

enter image description here

In poorer countries, agriculture tends to be lower productivity than other sectors, so those countries tend to show up as greener in the labour share than the GDP chart.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.