How do differences in income levels and income distribution among countries affect international business?

Often the single most important piece of information needed by international businesspeople about a country is its income level. Income level provides clues to the purchasing power of residents. The technological sophistication of local production processes, and the status of the public infrastructure.

One important source of income statistics is the World Bank, which divides the world’s countries into high-income, middle-income, low-income categories. High-income countries are those that enjoy annual per capital incomes of at least $ 9,266. Middle-income countries have per capital incomes of more than $ 755 but less that $ 9,266.Low-income countries have per capital income of $

755 or less. (Per capital income is usually measured by dividing a country’s

gross domestic product (GDP) by its population). Middle-income and Low-income countries are less attractive to international business because they offer

less consumer demand and lack the public infrastructure necessary for reliable production and distribution of goods and services.