This post has some interesting findings in the development economics/SME realm – in particular the impact of lack of finance for SMEs on exports and thus employment, innovation and growth. As in microfinance, the micro-level, anecdotal evidence differs from statistical analysis; Thorsten Beck et al previously found that although there is a correlation between SMEs and growth they cannot say that one causes the other.
Other interesting subjects include the benefits of diversified conglomerates in emerging economies – which they say is derived from internal capital markets, a phrasing which does not necessarily highlight their primary advantage; that of helping the company weather shocks.
In the same vein, but not mentioned in the blog, is the phenomena of clustering in emerging economies. Why do all the TV, scooter, book etc sellers in Hyderabad group together? Couldn’t they make more money by serving customers closer to their home and raising prices for the convenience? Surely, some entrepreneurial trader would have discovered the profit, so the answer is not only in tradition. Why does it take big corporate building malls to realize underlying value? Answers anybody?
Wednesday 17 March 2010
Subscribe to:
Post Comments (Atom)
Posts
1 comment:
"Why do all the TV, scooter, book etc sellers in Hyderabad group together? Couldn’t they make more money by serving customers closer to their home and raising prices for the convenience?"
Why do so many TV shops in London congregate around Tottenham Court Road? Or fashion shops around the King's Road, and art galleries around South Kensington?
Is it because (in Hyderabad and London) TVs and scooters are high value items, which will only be bought once or twice a decade, and are only accessible to middle class householders?
If each customer only visits you once every five years, there's little value to be had on placing the store 'conveniently'.
Better to be located in the neighbourhood where everyone in the city knows TVs/modern art/AC units are sold.
LEO H
Post a Comment