Abstract: This paper examines how anchor enterprises contribute to local economic development in Malawi. It finds that most of the income injected into local economies through these enterprises circulates locally, generating substantial spillover benefits beyond those directly linked to the enterprises. However, much of this spending passes through local businesses that source goods and inputs from outside the area, limiting the extent to which increased demand translates into local production, service provision, and employment. The findings highlight that broad-based local economic development depends not only on who receives income and how much they receive, but also on how that income is spent. Achieving broader development gains may require complementary investments in local businesses, finance, processing, infrastructure, supply chains, and skills to strengthen local supply responses.
Authors: Lara Cockx and Joachim De Weerdt
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