Financial liberalisation and industrial development in Malawi

Grant Kabango () and Alberto Paloni ()

Working Papers from Business School - Economics, University of Glasgow

Abstract: It has been suggested that financial liberalisation may be a key policy to promote industrialisation as it removes the credit access constraint on firms, especially small and medium ones. We investigate the effect of credit expansion in the wake of liberalisation on the structure of the industrial sectors in Malawi and find that, in contrast to the hypothesis above, it resulted in an increase in industrial concentration and a decrease in net firm entry, especially in sectors that are more finance dependent. The case of Malawi is interesting because financial liberalisation has been justified precisely as a means for industrial development and because the implementation of the policy has been regarded as relatively successful.

JEL-codes: G20 O16 O55 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-afr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Financial liberalisation and industrial development in Malawi (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2010_08

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