Exploring Emerging Markets' Demographic and Macroeconomic Dynamics and the Middle Class Growth: The Case of China and India

Romana Korez Vide, Irena Zavrl, Anica Hunjet


Emerging markets' political, economic, and social transition processes led
to altered demographic trends and new macroeconomic dynamics in these
economies. These changes triggered the growth of the middle class that
became an essential factor of emerging markets' attractiveness for sales and
production activities of foreign firms. The purpose of this article is to analyze
the demographic and macroeconomic trends of China and India in the decades
before the COVID-19 crisis, aimed at estimating their role in the growth of the
middle class and the consequent attractiveness of these two important emerging
markets for foreign firms. We formulate our research findings on the extensive
theoretical foundations and empirical analysis of selected demographic and
macroeconomic indicators related to the growth of the middle class. We
established that India fell behind China considerably concerning demographic
transition and macroeconomic dynamics in the observed periods. China enforced
a radical demographic transition. The comparative analysis of macroeconomic
dynamics showed a solid leadership of China in economic growth, international
trade and investment openness, technological advancement, employment,
the structure of the output, domestic investment, urbanization, and salaried
workers. Consequently, we estimated the lower growth of the Indian middle
class and its lower importance in foreign firms' decisions to enter the Indian
market. The findings brought some implications for international managers at
segmenting and selecting target foreign markets.


emerging market, middle class, demographic transition, macroeconomic dynamics, international business, China, India

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