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Constraints to the Growth of Small Firms in Northern Myanmar

El-hadj Bah and Geoff Cooper

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: rural investment climate; enterprize development; poverty reduction; Myanmar (search for similar items in EconPapers)
JEL-codes: L20 O10 O53 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-cse, nep-dev, nep-ent, nep-hme, nep-iue, nep-sbm and nep-sea
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Working Paper: Constraints to the growth of small firms in Northern Myanmar (2012) Downloads
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