A comparative analysis of Zambian and newly industrialised country manufacturing finance models

This study compares the Zambian and NICs manufacturing finance models to identify their similarities and differences with a view to enhance Zambia's manufacturing finance and consequently manufacturing development. It applies structural equation modelling on a merged dataset and contrasts four dimensions of manufacturing finance namely, access to working capital finance, access to investment finance, domestic private start-up investment and foreign private start-up investment. The study finds similarities and differences between NICs and Zambia, and across NICs, showing variations in variable effects across contexts owing to varying political and economic conditions. The study argues that effective policy learning requires analyses of the functional level variations in the learning and exemplar countries. The study contrasts four manufacturing finance models across the study countries, making three main contributions to literature. Firstly, while extant literature presents statistical and qualitative comparisons between NICs and developing countries for policy learning, comparison of the functional models is rarely addressed, this study attempts to fill this gap. Secondly, while finance literature focuses on generic access to finance by operating firms, this study simultaneously analyses four disaggregations of access to finance, namely, working capital finance, investment finance, domestic private start-up investment and foreign private start-up investment. These distinctions help understand the respective characteristics and interrelationships among firm creation investment, and working capital and investment finance for operating firms. Lastly, the study pioneers a detailed modelling of Zambia's manufacturing finance, a topic and context for which literature is limited.