Bah, El-hadj M. and Cooper, Geoff (2012): Constraints to the Growth of Small Firms in Northern Myanmar.
Download (644kB) | Preview
This paper uses survey data collected from Kalaymyo, a small urban city in North West Myanmar, to characterize firms and analyze the constraints limiting their growth. The level of firm ownership is very high but most firms are small, informal, operated out of the home, earning low income and with no employees. The most binding constraints are related to financing constraints, especially lack of access to informal credit. This is followed by the high degree of competition as the majority of firms are small retailers selling non-differentiated goods. This lack of credit combined with an apparent aversion to debt, limits the ability of entrepreneurs to take advantage of the high returns available on investment. We find that firms that made a capital investment over the last three years are significantly more profitable than those that did not.
|Item Type:||MPRA Paper|
|Original Title:||Constraints to the Growth of Small Firms in Northern Myanmar|
|English Title:||Constraints to the Growth of Small Firms in Northern Myanmar|
|Keywords:||rural investment climate; enterprize development; poverty reduction; Myanmar|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General
|Depositing User:||El-hadj M. Bah|
|Date Deposited:||03. Jul 2012 19:18|
|Last Modified:||08. Sep 2015 08:52|
Ayyagari, M., Demirguc-Kunt, A., Maksimovic, V., January 2008. How important are financing constraints? the role of nance in the business environment. The World Bank Economic Review 22 (3), 483-516.
Banerjee, A. V., Dufflo, E., 2011. Poor Economics. Perseus Books Group, Philadelphia,PA.
Batra, G., Kaufmann, D., Stone, A. H. W., May 2004. The firms speak: What the world business environment survey tells us about constraints on private sector development. Microeconomics 0405004, EconWPA.
Bigsten, A., Soderbom, M. M., March 2006. What have we learned from a decade of manufacturing enterprise surveys in africa? The World Bank Research Observer 21, 241-265.
Dinh, H. T., Marvidis, D. A., Nguyen, H. B., 2010. The binding constraints of firms'growth in developing countries, the World Bank Policy Research Working Paper Series 5485.
Dollar, D., Hallward-driemeier, M., Mengistae, T., October 2005. Investment climate and firm performance in developing countries. Economic Development and Cultural Change 54 (1), 1-31.
Fisman, R., Svensson, J., May 2007. Are corruption and taxation really harmful to growth? firm-level evidence. Journal of Development Economics 83 (1), 63-75.
Hausmann, R., Rodrik, D., Velasco, A., 2008. Growth diagnostics. In: Serra, N., Stiglitz, J. (Eds.), The Washington Concensus Reconsidered: Toward a New Global Governance. Oxford University Press, pp. 324-355.
Kelly, S., Werhane, P. H., Hartman, L. P., 2008. The end of foreign aid as we know it: the protable alleviation of poverty in a globalised economy. In: Wankel, C. (Ed.), Alleviating Poverty Through Business Strategy. Palgrave McMillan, pp. 5-32.
Krueger, A., 2007. The missing middle, iCRIER Working Paper 230.
Lipsey, R. G., Lancaster, K., 1956. The general theory of second best. Review of Economic Studies 24 (1), 11-32.
Love, I., Mylenko, N., 2003. Credit reporting and financing constraints, world Bank Policy Research Papers No3142.
Rajan, R. G., Zingales, L., June 1998. Financial dependence and growth. American Economic Review 88, 559-586.
Stern, N. H., January 1991. The determinants of growth. The Economic Journal 101 (404), 122-133.
Turnell, S., 2009. Fiery Dragons: Banks, Moneylenders and Microfinance in Burma. NIAS-Nordic Institute of Asian Studies Monographs.
Waverman, L., Meschi, M., Fuss, M., 2005. The impact of telecoms on economic growth in developing countries.