Managerial attributes and enterprise access to formal credit in Myanmar

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.Abstract: Using data from a new survey of small and medium-sized enterprises in Myanmar, we analyse enterprise demand for formal credit and the extent to which they are constrained in the formal credit market. We account for firms self-selecting out of the credit market in Myanmar. Our data contain information about individual firm owner/manager gender, managerial capacity, and attitude towards risk. We use this information to test whether the allocation of scarce loanable funds is systematically associated with these attributes. It emerges that managerial capacity and risk attitudes are positively associated with the probability of firms demanding credit, while firms with female owner/managers have lower probabilities of demanding credit. On the supply side we find no discernible links to any of the three traits, whereas firm's size and age have substantial impacts on the probability of obtaining credit. As such, the allocation of credit could improve if banks were better at identifying managers' managerial capacity and personality traits.

Wage returns to workplace training in Myanmar

“…The evidence presented in this article points to wage gains for trained as opposed to untrained workers, which under the perfect markets assumption indicates that employer‐provided training could play a role in increasing productivity of manufacturing workforce. Given the serious financial constraints faced by MSMEs in Myanmar (Hansen, Sørensen, et al, 2020), our results suggest that government support for development and implementation of workplace training programmes would be important for increasing performance of manufacturing MSMEs in Myanmar. As our results indicate that wage returns to training depend on the worker's level of education, this kind of enterprise support could also improve the income distribution in the economy.…”

“…Data used in the analysis are from the Myanmar Enterprise Monitoring Survey (MEMS) conducted in 2017 and 2019 (Berkel et al, 2018; Hansen, Sørensen, et al, 2020). The sample includes 2496 non‐state enterprises and 6722 of their employees in 2017 and 2497 enterprises and 5017 employees in 2019.…”

“…In 2019, all firms still in operation were reinterviewed and a subset of firms was selected from updated municipal lists to replace those firms that stopped operating between 2017 and 2019. More detailed information about the sampling is available in Berkel et al (2018) and Hansen, Sørensen, et al (2020).…”

“…The technical and vocational education and training system is also assessed as inferior when compared to other Southeast Asian countries and largely operates without the input from the private sector, employers', or workers' organizations (International Labour Organization, 2020; Milio et al, 2014). As in many other LMICs, enterprises in Myanmar indicate that the low level of skills among the employees severely restricts firm performance (Berkel et al, 2018; Hansen, Sørensen, et al, 2020). The need for additional labour force training has also been recognized as one of the crucial components of the MSME development policy in Myanmar (Government of Myanmar, 2015).…”

Informality and firm performance in Myanmar

“…Because of the basic nature of the industrial activities in Myanmar, electricity may play such a substantial role that power-driven machinery accounts for a statistically significant difference among firms. The country's economy has been isolated for many decades, the government suppressed all firms that were not state-owned in the 1980s, and access to finance is limited even for the firms with the highest growth potential (Hansen et al 2019;Odaka 2016;Stokke et al 2018;World Bank 2019).…”