កម្ពុជាក្នុងឋានៈជាប្រទេសមានប្រាក់ចំណូលមធ្យម – អន្ទាក់ ឬកាលានុវត្តភាព៖ ការជំរុញថាមវន្តនៃក្រុមហ៊ុនដែលមានផលិតភាពខ្ពស់ (ផលនៃការបែងចែកធនធានឡើងវិញ) ភាគ ៣

សារគន្លឹះ

• អត្ថបទប្លុកនេះគឺជាអត្ថបទភាគ ៣ នៃកម្រងអត្ថបទប្លុកដែលមាន ៣ ភាគ ដែលសិក្សាឈ្វេងយល់ក្នុងកម្រិតក្រុមហ៊ុន អំពីអ្វីដែលកម្ពុជាត្រូវការ ដើម្បីផ្លាស់ប្តូរទៅរកយុទ្ធសាស្ត្រកំណើនដែលផ្អែកលើផលិតភាព។
• អត្ថបទប្លុកនេះពិនិត្យមើលស្ថានភាពដ៏ស្មុគស្មាញ និងគួរឱ្យងឿងឆ្ងល់ នៅពេលដែលក្រុមហ៊ុនដែលមានផលិតភាព មានកម្មករល្អ អ្នកគ្រប់គ្រងល្អ និងផលិតផលល្អ ប៉ុន្តែបែរជាបរាជ័យក្នុងការពង្រីកអាជីវកម្មរបស់ខ្លួន។
• ការប្រកួតប្រជែងផ្តល់នូវយន្តការទីផ្សារដ៏សំខាន់មួយ ក្នុងការអនុញ្ញាតឱ្យក្រុមហ៊ុនដែលមានផលិតភាពខ្ពស់អាចពង្រីកខ្លួន ដោយជំនួសឱ្យក្រុមហ៊ុនដែលមានផលិតភាពទាប។
• ទោះបីជាកម្ពុជាមានសេដ្ឋកិច្ចដែលមានការប្រកួតប្រជែងក៏ដោយ ក៏ចំណុចនេះមិនទាន់ទទួលបានការគាំទ្រគ្រប់គ្រាន់ ផ្នែកក្របខ័ណ្ឌនគោលយោបាយប្រកួតប្រជែងដែលមានដំណើរការល្អនៅឡើយទេ។
• ប្រព័ន្ធហិរញ្ញវត្ថុនៅកម្ពុជាមានដំណើរការល្អ និងមានបទពិសោធន៍ក្នុងការផ្តល់កម្ចីដល់ក្រុមហ៊ុនដែលមានផលិតភាព និងសកម្មភាពប្រកបដោយថាមវន្ត។
• នៅកម្ពុជា មានភស្តុតាងតិចតួចប៉ុណ្ណោះដែលបង្ហាញថា ក្រុមហ៊ុននិងសហគ្រាសធំៗដែលមានបណ្ដាញទំនាក់ទំនងរឹងមាំ អាចប្រើឥទ្ធិពលរបស់ខ្លួនលើគោលនយោបាយសេដ្ឋកិច្ច ដើម្បីរារាំងការរីកចម្រើនរបស់អាជីវកម្មបង្កើតថ្មី និងអាជីវកម្មខ្នាតតូចដែលមានផលិតភាពខ្ពស់ជាង។
• ប៉ុន្តែមានភស្តុតាងយ៉ាងច្បាស់ថា អាជីវកម្មលក្ខណៈគ្រួសារ និងគ្រប់គ្រងដោយគ្រួសារ គឺមានការគ្រប់គ្រងមិនសូវបានល្អ ហើយការពង្រីកក្រុមហ៊ុនតែងតែជួបប្រទះនូវបញ្ហាប្រឈមនានា ទាំងនៅកម្ពុជា និងនៅតាមបណ្តាប្រទេសផ្សេងទៀត។

Key Messages

• This blog is the third in a three-part series that explores, at the firm level, what is needed for Cambodia to shift towards a productivity-led growth strategy.
• This blog looks at the puzzling situation when a productive firm with good workers, good managers, and a good product fails to expand.
• Competition provides a crucial market-based discipline in allowing productive firms to expand at the expense of less productive firms.
• Although Cambodia has a competitive economy, this is not properly supported by a well-functioning competition policy framework.
• The financial system in Cambodia functions well and is adept at providing loans to productive and dynamic firms.
• We need more research to better understand if politically well-connected incumbent firms in Cambodia influence economic policy to prevent the growth of newer, smaller, and more productive firms.
• There is clear evidence that family-owned and -operated businesses are less well managed and experience constraints on growth in Cambodia and beyond.

Introduction

Productivity is defined as “the efficiency with which societies combine their people, resources, and tools.” Nobel Prize-winning economist Paul Krugman famously argued, “Productivity isn't everything, but, in the long run, it is almost everything.” Higher productivity can benefit firms (higher profits), workers (higher wages), consumers (lower costs of goods and services), and governments (higher tax revenue). Very few countries have graduated into high-income status over the last 150 years, which is a productivity problem.  Estimates show that around half of the income differences between the richest and poorest countries is due to productivity. In the first blog in this series, we noted that Cambodia has successfully mobilised resources for development—moving workers from fields and households to the factory, providing the young with basic literacy, and boosting savings and investment to very high levels. The strategy that helped drive Cambodia from low- to middle-income status is running out of steam. This blog is the third in a three-part series that explores, at the firm level, what is needed for Cambodia to shift towards a growth strategy based on productivity.

To think about the policy implications for a productivity-led growth strategy, we need to start with the research on what drives productivity. The most obvious starting point is to identify those constraints that prevent new and dynamic domestic and foreign firms from establishing a presence in the Cambodian economy. Hence, research has focused on the speed and cost of registering a new business in Cambodia (an example of the selection effect) or has asked whether there are enough skilled workers to utilise new technology or skilled managers to closely monitor and improve productivity inside firms (the within-firm effect). Some research has stepped back to ask if the wider society promotes entrepreneurship, whether entrepreneurs are rewarded relative to other professions (in the public sector, for example), and whether people have the personal traits of drive, grit, and risk to be entrepreneurs. This blog looks at the puzzling situation when a productive firm with good workers, good managers, and a good product fails to expand. This blog reviews the third driver of firm-level productivity—the reallocation effect, discusses what we know for the Cambodian case, and derives some policy conclusions.

Productivity in Cambodia: Disappointing but there are Productive Firms

As part of the Cambodia 2030 research, CDRI calculated that since 2001, Cambodia’s economic growth has been driven primarily by public and private investment rather than by gains in productivity. In the December 2024 Economic Update for Cambodia, the World Bank (using a survey of 519 firms) noted that, “labor productivity among all Cambodian firms” is “significantly lower than firms in peer countries overall (41 percent lower) as well as across both the manufacturing and service sector.”

The World Bank Enterprise Survey 2023 shows that the most productive 10 percent of firms in Cambodia are thirteen times more productive than the bottom 10 percent of firms. In services, the ratio is eighteen-fold. These ‘frontier firms’ are overwhelmingly small (91 percent) and domestically owned (96 percent)—these are the firms that should be expanding and driving productivity growth in Cambodia.

The Reallocation Effect in Cambodia

Research conducted as part of the World Bank 2024 Middle Income Trap project shows that in middle-income countries, a small number of companies tend to dominate the market, turnover among market leaders is low, and entrants fail to grow or exit, most remaining as micro enterprises with less than five employees. In India, Mexico, and Peru, if a firm operates for forty years, it will roughly double in size. In the US, by comparison, the average young firm grows by a factor of 7 by age 40 as startups expand or exit.

These growth patterns have left huge unrealised gains from reallocating resources from less to more efficient firms. One influential 2009 study by Pete Klenow and Chang-Tai Hsieh showed that total factor productivity (TFP), the combined productivity of all factors of production (land, labour, and machinery), could increase by up to 60 percent in India by reallocating resources from less to more productive firms. Research from the World Bank in 2018 showed that these gains could reach between 50 and 100 percent in Ethiopia, Ghana, Turkey, Malaysia, and the Philippines, and up to 160 percent in Kenya. We have already noted that there is a significant dispersion of labour productivity in Cambodian firms, which differs by a factor of 13 from the top and bottom ten percent of firms.

a)    Competition

In an open and competitive economy, banks seeking to maximise return on loans will lend to the most productive and profitable firms; the best workers and managers will prefer to work for dynamic and expanding firms paying higher wages; the most productive firms able to use resources efficiently will pay more for land, labour, and capital—so bid them away from less productive firms. In reality, regulations may favour incumbents by restricting market entry or limiting the number of market participants. Incumbents may takeover small innovative firms to kill competing firms and technologies. The fourth blog in this series showed how insolvency laws in Cambodia make it difficult for firms to exit, meaning that inefficient incumbents hold onto market shares that should be available to more dynamic and productive firms. Trade openness both subjects a market to more competition and enables firms to grow by improving access to larger markets, international value chains, technology and know-how.

Evidence shows that Cambodia does need to improve the functioning of competition. The 2025 World Bank B-Ready report defines competition as “good practices related to the enforcement of competition policy, intellectual property rights and innovation policy, and regulations that focus on improving competition and innovation in markets where the government is a purchaser of services or goods across the three different pillars.” Table 1 shows that Cambodia performs poorly in competition policy, relative to a maximum and when compared to regional comparators, Vietnam and Malaysia.

Table 1: Market Competition in Cambodia

	Max Score	Malaysia	Vietnam	Cambodia
Pillar 1: Quality of Regulations that Promote Market Competition	100	49.29	57.91	43.14
Pillar 2: Public Services that Promote Market Competition	100	61.2	37.01	32.13
Pillar 3: Implementation of Key Services Promoting Market Competition	100	53.4	47.92	41.07

Source: World Bank 2025

Despite the lack of policy support, competition in Cambodia is still functioning. According to the 2023 World Bank Enterprise Survey, only 0.3 percent of Cambodian firms reported fewer than two competitors in their main product's main market (excluding firms whose main market is international), and 83.5 percent reported more than five competitors. 80.4 percent of Cambodian firms reported that they could not increase prices more than competitors without losing customers, compared to 73 percent in low-income, 74.8 percent in lower middle-income, and 73.8 percent in upper middle-income countries respectively. As one specific measure of competition, it was easier in Cambodia to switch internet providers (100 the easiest), showing that it was easier in Cambodia (86.5) than in low-income (69.5), lower middle-income (70), and upper middle-income countries (73) respectively. The weakness of the domestic competition policy environment is offset by openness. The trade ratio is measured as the total of imports and exports as a share of GDP and was much higher in Cambodia (2024) (143 percent) than the average of either low-income (56 percent), middle-income (55 percent) or upper middle-income (47 percent) countries.  Without proactive policy support, there are some worrying signs that competition in Cambodia will decline over time. A competition index (100 being a significant increase) over last year showed that competition increased by less in Cambodia (67.3) than in either low-income (83.5), lower middle-income (78.6), or upper middle-income (75.3) countries respectively.

b)    Access to Credit

The lack of credit may prevent newer or smaller firms from borrowing to invest and expand. There is no clear evidence that significant numbers of firms in Cambodia are credit constrained. The share of firms in Cambodia that were fully or partially credit constrained fell from 16.4 and 15.8 percent in 2016 to 4.1 and 10.4 percent in 2023 respectively. In 2023, zero percent of firms in Cambodia reported access to finance as their biggest obstacle, compared to 30.3 percent in low-income, 20.7 percent in lower middle-income, and 16.3 percent in upper middle-income countries respectively.  A 2025 survey by the Asia Foundation of more than 2,700 firms in Cambodia found that even informal firms could access bank loans and that the overwhelming reason for not having bank loans was the lack of need. This is confirmed in Table 2 by the 2025 World Bank B-Ready survey, which showed that the quality of financial regulations, accessibility of financial information, and actual functioning of financial services was both commendably high in Cambodia and even better than in regional comparators, Malaysia and Vietnam.

Table 2: Financial Services in Cambodia

	Max Score	Malaysia	Vietnam	Cambodia
Pillar 1: Quality of Regulations for Financial Services	100	79.16	75.4	80.74
Pillar 2: Accessibility of Information in Credit Infrastructure	100	72.83	85.33	87.33
Pillar 3: Operational Efficiency of Receiving Financial Services	100	69.23	80.23	85.28

Source: World Bank 2025

c)     Incumbent Advantage

Recent Nobel Prize winners in economics, Daren Acemoglu and James Robinson, discussed in their influential book ‘Why Nations Fail’ how politically influential incumbent firms can manipulate economic policy to their own advantage. In the 2024 World Development Report, the World Bank noted that many inefficient incumbent firms benefit from government restrictions on the entry of new firms, subsidies, or access to bank credit determined by political connections, meaning that young and dynamic firms are unable to grow. A seminal study of Pakistan showed that firms with influential politicians on their boards received 45 percent larger loans and experienced 50 percent higher default rates. This preferential treatment was driven by government banks, over which those politicians had influence.

What limited research there is does not suggest that incumbent advantage has a significant impact in Cambodia. Between 2007 and 2016, there was one cement plant in Cambodia; exports were met from Thailand, where 3 cement firms produced 85 percent of local production. One study from 2016 found no evidence that these dominant existing firms being able to deter the entry of new producers. By 2025, the Cambodian media was reporting that a Cambodia-Hong Kong joint venture had invested USD250 million to become the sixth company to establish a cement factory in Cambodia. Another local story is that of Brown Coffee, which started with its first outlet in 2009 and by 2025 had grown to around 40 locations, displacing global behemoth Starbucks. The World Bank Enterprise Survey for 2023 found that the leading constraint on doing business was ‘practices of the informal sector,’ chosen by 41.7 percent of firms, not the practice of large incumbent firms.

This limited evidence needs to be supplemented with new research in Cambodia, which could learn from sector-specific research in India. In India, research shows that there is systematic incumbent advantage in those sectors that require government permissions to undertake investment and business activity. Such sectors include real estate, infrastructure, construction, mining, telecom, cement, and media.

d)    Firm-Ownership and Management

The institution of the family firm may offer some advantages, such as raising start-up or investment capital from family members, being able to rely on family loyalty to motivate effort, and relying on family inheritance to create a long-term orientation for managers. A family business may also be constrained in growing because senior managers can only be selected from among current family members. There may also be a distinct problem at the death of the founder, as the new head may be limited to the oldest son of the founder (regardless of talent) or else the firm becomes subject to a debilitating battle for succession among surviving relatives. The leading research team on the economics of management, led by Nick Bloom, finds in a global sample of firms that family firms, defined “as firms owned by the descendants of the founder” that are also family-managed, “have a large tail of badly managed firms.” There is some suggestive evidence in the Cambodian case. The World Bank Economic Update 2024 noted that firms managed by an independent chief executive officer (CEO) are 20 percent more productive than firms managed by their owner; by contrast, another study found little impact from family business.

The policy implications are for governments to avoid supporting family business structures and to subject them to the discipline of the market. Many governments around the world also provide strong tax subsidies for family firms; for example, the United Kingdom has many more family-run and -owned firms than the United States and Germany, which is related to the UK tax exemption for inherited business assets. The recent trend across Asia and Europe for private equity to purchase formerly family-owned and -operated businesses has been associated with an improvement in management.

Conclusion

This blog looks at the puzzling situation when a productive firm, with good workers, good managers, and a good product, fails to expand. For the case of Cambodia, there are big differences in the least and most-productive firms, indicating that a reallocation of investment, labour, and land would boost overall productivity. Of the three-part series on firm drivers of productivity, this blog was the most ambivalent, finding that Cambodia was a competitive economy, showed few indications of credit constraint or significant incumbent advantage, and some limited evidence that the structure of family businesses may be a productivity drag. More research is clearly needed.

 

Look out for our sixth blog, Middle-Income Cambodia – Trap or Opportunity: Firm-Level Formalisation and Productivity.

 

Authors:

Prof Dr Matthew McCartney, Chief Economist, CDRI
Dr Khath Bunthorn, Publication Manager and Research Associate, CDRI’s Centre for Governance and Public Innovation