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Constraints to the growth of small firms in Northern Myanmar

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  • Bah, El-hadj
  • Cooper, Geo

Abstract

This paper uses survey data collected from North Western Myanmar to analyze business activity and determine the most binding constraints to firm growth. While the level of entrepreneurship is very high, most firms earn low income and are small and informal with no employees. The most binding constraints are related to financing and competition. We find that informal credit constrained firms grew 8.4% less in 2008-2010. This lack of credit combined with an apparent aversion to debt, limit investment despite high returns. Returns on investments are about 73% per year, which is within the range found in other developing countries.

Suggested Citation

  • Bah, El-hadj & Cooper, Geo, 2012. "Constraints to the growth of small firms in Northern Myanmar," CIS Discussion paper series 577, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:cisdps:577
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    Cited by:

    1. Mughees Tahir Bhalli & Shahid Mansoor Hashmi & Arslan Majeed, 2017. "Sensitivity of Firms’ Investment and Cash Flow: A Case Study of Manufacturing Sector of Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(64), pages 28-47, June.
    2. Ebuka Christian Orjiakor, 2022. "Business climate and firm exit in developing countries: evidence from Nigeria," Future Business Journal, Springer, vol. 8(1), pages 1-13, December.

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    More about this item

    Keywords

    rural investment climate; enterprise development; poverty reduction; small firms growth; Myanmar;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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