Fostering capacity utilisation and profitability to enhance private sector investment

Authors: R. Record; S. Davies Publisher: Eldis Document Store, 2007 Drawing upon a comprehensive survey that assesses the current state of private sector investment in Malawi, this paper finds that: low labour productivity in Malawi is explained by poor utilisation of labour resources rather than by insufficient capital firms with monopoly power are less likely to invest in increased capacity facing high interest rates, the private sector in Malawi tends to adopt a low risk strategy of little investment bribery operates as an informal tax and therefore does not alter investment incentives that much Malawian policy makers have to ensure that firms currently stuck in a low equilibrium converge towards those enterprises experiencing higher capacity utilisation and greater profitability. This is particularly important as only the... [read full story]