Lorem ispum dolor lorem ipsum dolor ametIn-depth Studies Nay Pyi
Taw, 28 September 2017
Henrik Hansen, John Rand, Paula Rodriguez, Finn Tarp and Neda
Trifkovic
Overview • 2 in-depth studies based on 2017 data (completed)
– Industrial Agglomeration in Myanmar
– Managerial attributes and enterprise access to formal credit in
Myanmar
• 2 studies based on 2018 data (work in progress)
– MEMS 2018 Lab-in-the-Field Experiment Report
– Governance of global value chains, state and small businesses:
The case of timber in Myanmar
Industrial Agglomeration in Myanmar: Introduction
• Concentration of economic activity
• Benefits
• Drawbacks
• We investigate labor productivity differentials of operating/not
operating in an industrial zone in Myanmar for private
manufacturing enterprises
• We study implications for working conditions, such as labor share
in value added, employee wages, working hours, social benefits, and
female labor force participation
• We compare the outcomes of enterprises from industrial zones and
enterprises from naturally formed industrial clusters
Industrial Agglomeration in Myanmar: Productivity (1) (2) (3) (4)
(5) Industrial zone 0.122***
(0.041) 0.128*** (0.042)
0.000 (0.000)
Cluster EGI
-0.726*** (0.074)
Cluster D
0.000 (0.002)
Cluster 2
-0.042 (0.032)
4.751*** (0.324)
4.798*** (0.324)
4.747*** (0.324)
4.746*** (0.324)
Other controls Yes Yes Yes Yes Yes Sector FE Yes Yes Yes Yes Yes
Township FE Yes Yes Yes Yes Yes Observations 2,467 2,467 2,467
2,467 2,467 R2 0.83 0.83 0.83 0.83 0.83
(1)
(2)
(3)
(4)
(5)
0.000 (0.000)
Cluster EGI
-0.726*** (0.074)
Cluster D
0.000 (0.002)
Cluster 2
-0.042 (0.032)
Yes
Yes
Yes
Yes
Yes
Observations
2,467
2,467
2,467
2,467
2,467
R2
0.83
0.83
0.83
0.83
0.83
Industrial Agglomeration in Myanmar: Employee outcomes (1) (2) (3)
(4) (5) Share of female
labor Wage share in value added
Employee wage (ln)
1.924*** (0.458)
9.983*** (0.204)
-0.180 (0.309)
1.769*** (0.081)
Controls Yes Yes Yes Yes Yes State FE Yes Yes Yes Yes Yes Sector FE
Yes Yes Yes Yes Yes Observations 2,467 2,467 6,632 6,632 6,632 R2
0.38 0.10 0.41 0.20 0.15
(1)
(2)
(3)
(4)
(5)
Employee wage (ln)
Managerial attributes and enterprise access to formal credit in
Myanmar: Introduction • McKenzie and Woodruff (2017) find a
positive relationship between owner/manager
capacity and the ease with which firm owners/managers learn and
adopt good business practices
– They show that the implementation of business practices—related
to financial planning, marketing, and record keeping—increases
firm-level productivity
– However, their study does not say much about the mechanisms
linking managerial abilities and firm productivity
• Differences in risk preferences and gender of the owner and
manager have been linked to both credit demand and firm
performance
Managerial attributes and enterprise access to formal credit in
Myanmar: Objectives
• We analyse the importance of owner/manager attributes for
enterprise debt demand and credit constraints
• We use questions about risk attitudes and create an index
measuring firm owner/manager attitudes towards risk and investigate
how they affect credit demand
• We investigate how gender of the firm owner/manager affects debt
demand and credit constraints
MEMS 2018 Lab-in-the-Field Experiments
• Business success in SMEs
– External factors: various aspects of the business
environment
• The role of government in creating an environment that is
conducive to SME success
• Access to finance and training, functional legal and regulatory
framework
– Internal aspects of SME success: both the organizational
variables and the characteristics of the small business owners or
managers
• Managerial and planning skills, overall entrepreneurial
capabilities
• Risk preferences, trustworthiness and pro-sociality have been
found to affect market performance
MEMS 2018 Lab-in-the-Field Experiments: Objectives
• We have incorporated a lab-in-the-field experiment in the Myanmar
Enterprise Monitoring System project, as experimental data can help
us shed the light on the role of owners’ personal preferences and
behavior in determining SME success
• The lab-in-the-field experiment within the MEMS project comprises
five behavioral games: dictator, bargaining, trust, public goods
and risk preference elicitation game
• The games were presented to participants in this exact order in a
web-based application created in oTree
0.0
0.2
0.4
0.6
0.8
1.0
Less pro-social More pro-social
Risk loving Risk averse
Risk loving Risk averse
• Even though in theory, pro-sociality could have implications for
business success, we have not discovered a significant relationship
between preference for pro-sociality and enterprise profit
• The risk preference measure does not correlate with enterprise
performance
• Experimentally measured personal preferences ay not factor in
strongly in business decisions and performance when the business
environment is not supportive for SME development
• The findings emphasize the role of business environment over
personal preferences for business performance in Myanmar,
indicating a need for policies that are supportive of the SME
sector development, such as possibly improving the investment
climate and functioning of cooperative initiatives, such as
business associations
Governance of global value chains, state and small businesses: The
case of timber in Myanmar • Rapid deforestation has been a cause of
several policies related to forest
management
– Logging ban, export ban
• We analyse the regulatory framework under which enterprises in
the wood industry operate and how international ecological
discourses affect forest management and private business from the
wood industry in Myanmar
• How does the state absorb and apply to policy differing
requirements, while so many small businesses depend on timber to
survive?
0 10
0 20
0 30
0 40
0 Ex
po rt
v al
ue (m
ill io
n U
SD )
IND CHN THA BGD HKG SGP VNM EU AND ARE JPN MYS USA AUS PAK
KOR
Performance of wood industry
0 5 10 15 20 Profits per employee (million MMK)
Leather Motor vehicles
Apparel Wood
Tobacco
0 5 10 15 20 Value added per employee (million MMK)
Leather Motor vehicles
Apparel Electrical machinery Other transport eq.
Wood Textiles
Paper Tobacco
Results
• The state is responsible for the protection of forest resources
and the promotion of environmental regulation
– State is the only permitted producer
– Conflicting interests between the Ministry of Agriculture,
Livestock and Irrigation and the Department of Forestry, as they
are currently building their individual institutional objectives on
the same lands
– This may result in environmental regulations being
sidelined
– Myanmar Forest Certification Committee as a way of gaining access
to more lucrative (and stringent) international timber
markets
• Regulatory pressure: licensees, fees, wood access restrictions,
increased price of inputs, wood quality deficiencies, declining
demand
– Small sawmills especially affected
Slide Number 5
Industrial Agglomeration in Myanmar: Employee outcomes
Managerial attributes and enterprise access to formal credit in
Myanmar: Introduction
Managerial attributes and enterprise access to formal credit in
Myanmar: Objectives
Slide Number 10
Slide Number 13
Slide Number 14
MEMS 2018 Lab-in-the-Field Experiments: Conclusion
Governance of global value chains, state and small businesses: The
case of timber in Myanmar
Slide Number 17
Slide Number 18