Firm capability effects of connecting buyers and sellers in Myanmar

Starting in 2011, Myanmar has implemented a number of reforms aimed at turning the country into a market economy. Recognising this effort, the international community began to remove sanctions, enabling domestic firms to exit form half a century of isolation. The success of Myanmar businesses on international markets is going to be crucial for the country to embark on a path of sustained and inclusive growth but, notwithstanding investors’ and buyers’ interest in Asia’s last frontier, this endeavour is bound to face a number of challenges. With the country coming out of decades of near-autarchy, information is poised to be limited on both sides of the market and institutional failures are likely to exacerbate this constraint (e.g. the country ranks 185/189 for World Banks’ “Contract Enforcement” index).

The first objective of this project is to investigate the impact of such information and search frictions on the development of trade relationships between local firms and international buyers. To do so, we partnered with Building Markets, an NGO specialised in profiling local firms and matchmaking, and will implement a comprehensive survey of the firms along the timber and woodwork value chain in Yangon Region. Subsequently, we will evaluate the impact on SME and market growth of addressing information frictions in collaboration with Building Markets through an RCT.