Financial liberalization and the industrial response: concentration and entry in Malawi

Kabango, G.P. and Paloni, A. (2011) Financial liberalization and the industrial response: concentration and entry in Malawi. World Development, 39(10), pp. 1771-1783. (doi:10.1016/j.worlddev.2011.04.001)

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Abstract

It has been suggested that financial liberalization may be a key policy to promote industrialization 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 liberalization 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 liberalization has been justified precisely as a means for industrial development and because the implementation of the policy has been regarded as relatively successful.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Paloni, Dr Alberto
Authors: Kabango, G.P., and Paloni, A.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:World Development
ISSN:0305-750X
Published Online:08 May 2011

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