Business registration and firm performance

A case of maize traders in Malawi

Bibliographic Data

ID5012700
AuthorsHenry Kankwamba (0000-0002-2812-5644, Schlumberger (Ireland), corresponding author), Lukas Kornher (0000-0002-2324-015X, Twitter (United States))
Year2020
Volume30
Issue7
Pages850-861
Publication date2020-10-02
Open AccessNo
TypeARTICLE
VenueDevelopment in Practice (JOURNAL)
Journal identifiersISSN: 0961-4524 • E-ISSN: 1364-9213
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09614524.2020.1747985
OpenAlexW3024604054
LanguageEN
Citations received1
References cited26

Small businesses could spur economic growth. Most African small businesses are not formally registered, and informality leads to loss of government revenue. This article assesses the effect of business registration on firm performance in Malawi’s maize sub-sector. The study uses panel data of 172 traders from Malawi, and instrumental variable estimation on a systematically drawn sample. The results indicate that when registered, traders make four times less profits. Variables such as sex, exporters, information gathering and general trading had positive effects on business profitability. Unless the business environment is reformed in favour of small businesses it does not pay to register

Business · Economics · Instrumental variable · Labour economics · Panel data · Profitability index · Revenue · Small business · Firm Innovation and Growth · Taxation and Compliance Studies · Working Capital and Financial Performance · Finance

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