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Mongolia’s economy is projected to grow by 5.6 per cent in 2026, supported by mining strength and supply-driven momentum, even as inflation remains elevated and fiscal pressures mount. This outlook unfolds amid political upheaval and an ambitious reform agenda, leaving Mongolia’s stability dependent on external commodity markets, Chinese demand and the government’s ability to sustain consolidation and structural change.
Prior research demonstrated that men-owned new ventures outperform women-owned new ventures in terms of financial performance. In this study, we argue that the performance of female versus male entrepreneurs is contingent upon their social networks: Larger and more diverse networks of female versus male entrepreneurs enable them to perform as well as male entrepreneurs and even outperform them. Based on survey data of 70 (35 men versus 35 women) entrepreneurs from Mongolia, we examine the moderating effects of network structure (i.e., size, gender diversity, and functional diversity) on the relationship between entrepreneurs’ gender and new venture revenue growth. We found that a larger network size of female entrepreneurs helps them to outperform male entrepreneurs in terms of revenue growth. The research implications are discussed.
Mongolia's mining sector dominates its economy, contributing nearly 30 per cent to GDP and over 90 per cent to exports. While this brings substantial economic benefits, it creates significant challenges for the country's traditional nomadic herding culture and environment. The nation faces critical water scarcity, land degradation and community displacement decisions. Despite regulatory efforts and local-level agreements, the balance between mining prosperity and environmental sustainability remains elusive, demanding innovative solutions and stronger enforcement mechanisms.
This paper explores the heterogeneity across small and medium-sized firms (SMEs) regarding the impact of and response to the COVID-19 shock. We aimed to answer two main research questions: does the effect of COVID-19 vary depending on the firm's characteristics, and were the government policies effective in combating the adverse impact? We used data from the 2021 Enterprises Census conducted by the National Statistics Office (NSO). Our sample includes 43,982 SMEs. We employ two analytical strategies: the OLS multiple regression model and the two-stage Heckman’s selection correction model to avoid self-selection bias in estimating the impact of policies. Too restrictive and unclear government policies severely exacerbated the economic hardships of small businesses during the pandemic. The generous stimulus package led to high inflation levels at the macroeconomic level and had mixed results at the firm level. Policies have generally been more effective in retaining jobs but less effective in sales. The one policy targeted at job retention – employee benefits and support –failed. Loan support and utilities payment exemption have positively impacted sales but were less beneficial in terms of retaining workers.
This article deals with the overhaul of Economics education in Mongolia in the early 1990s. Economics education needed to be changed drastically following the country’s transition to the market economy. This was successfully completed with the financial support of the EU through its TACIS program. In 1995 the National University of Mongolia collaborated with the University of Manchester in revising the academic curricula, building capacity among the academic staff of the NUM, developing brand new course syllabi, advancing teaching methodology, and conducting joint research. The collaboration was considered to be a success because, as a result, the NUM was able to build brand new undergraduate degree programs in in Economics and Business, which met the standards of leading universities around the world. Ultimately, the country was able to produce its nationally trained staff in accordance with the international standards. The capacity built at the NUM enabled such transition. The impact went beyond the NUM, as other universities revised their curricula following the NUM. A monograph on a Mongolian economy was jointly produced by professors at both universities, which also marked the first international publication produced by the Mongolian scholars. The program was further expanded with the scholarships provided by the Soros Foundation, where dozens of young Mongolians were trained over the years at the University of Manchester in the field of Economics, Agricultural Economics, and Development Economics. The NUM was the price beneficiary of this program.
Mongolia is a small open economy highly dependent on foreign markets in terms of inputs and intermediate goods as well as sales of final products. As a result, businesses in Mongolia, small and big alike, are highly vulnerable to external shocks. In the recent years, the COVID-19 pandemic disrupted Mongolia’s economic interactions with its foreign counterparts, resulting in supply chain interferences, high inflation, overall poor economic performance and reduced living standards for households. Using the Enterprise Census 2021 data, this study looks at the performance of micro and small enterprises in Mongolia. The enterprise census was conducted by the National Statistics Office in November 2021 and covered about 180,000 business and public entities in the country. We look at the performance of 54,438 micro and small businesses with number of employees below 50, that were active in 2021. We use sales revenue and others as performance measures. At the descriptive level, we look at the variation in performance across different sectors, location (urban vs. rural), foreign investment, exports and firm age. As expected, firm age, exports and urban location are positively correlated with sales revenue. About a quarter of small businesses reported reduction in assets, 34.9% reduced production levels, 27.9% increase in receivables, 48.9% increase in debts, and 36.2% increased losses in 2021 compared to 2020. We divide small businesses into “key” and “non-key” firms based on the government policies during the lockdown and other restrictions. Some sub-sectors, such as infrastructure, health, energy were considered to be “essential” to the functioning of the society and therefore were subject to lower level of restrictions. They are termed “key” firms in the study. Others were subject to significantly stricter rules, such as social distancing, travel and other restrictions. Controlling for sector and location-specific fixed effects, we look at the determinants of economic performance of small businesses, including key economic activity, number of employees, sector, export orientation, debt, technology, innovation, R&D, and access to government stimulus package. Preliminary results show that urban small businesses with greater number of employees as well as longer business experience performed better. Furthermore, lower debt, access to government policies, as well as being in the key economic activity had a substantial positive effect on firms’ performance.
To a small economy like Mongolia, foreign direct investment (FDI) is a key catalyst in promoting economic growth. Since reaching a peak in 2011, FDI in Mongolia has been declining. In a series of studies titled “Foreign Direct Investment Inflow in Mongolia” conducted by the ERI, first, the impact of FDI on the Mongolian economy was estimated and the main factors influencing and attracting FDI were identified. It was ultimately found that FDI inflow into a country was largely determined by the country’s investment environment. As the availability of minerals is an unchangeable factor, countries try to improve their investment climate to attract foreign investors. Therefore, the study focused on the analysis of the investment environments of other comparable countries to develop a set of recommendations that could be implemented in Mongolia based on the best practices of these countries. The countries chosen for comparison were Chile, Kazakhstan, Peru and Zambia, and Mongolia. In Mongolia, disputes with foreign investors and ill-conceived policy decisions were the factors most detrimental to its investment environment. So the final study of the series focused on investment dispute resolution and ways to improve contract enforcement institutions in the mining sector as most FDI into Mongolia is centered around the mining sector.
ГШХО-ын үр нөлөө нь дотоодын зах зээлд хэр их шингэхээс хамаарна. Ихэнх ГШХО нь уул уурхайн салбарт хийгддэг бөгөөд шаардлагатай капитал хөрөнгө оруулалтыг дотоодоос нийлүүлэх боломжгүй тул энэ нь ГШХО-ын үр ашгийг бууруулж байна. Уул уурхайн салбарт баялгийн нөөцөөс голчлон (60%) хамаардаг тул энэ салбар дахь хөрөнгө оруулалт Монгол Улсад давамгайлж байна. Монгол Улсын хөрөнгө оруулалтын орчин ГШХО-ыг татахад хангалтгүй байна. Тогтвортой орчин нь - Институцийн болон бизнесийн орчин тогтвортой байх буюу хууль журмуудыг ойр ойрхон өөрчилдөггүй байх, Хууль эрх зүйт төр болон засаглалын чанарыг сайжруулах, Уул уурхайгаас бусад салбарыг хөгжүүлэхэд хөрөнгө оруулалтын орчин шийдвэрлэх нөлөөтэй байна.
Foreign Direct Investment (FDI) is considered to be an important source of financing for developing countries. This study looks at the impact and determinants of FDI inflow in Mongolia. The bulk of FDI comes into the mining sector. Using the input-output table, we estimate the additional spending across all economic sectors that are instigated by FDI inflow in the mining sector. According to our estimates, these created 0.32 and 0.25 percent of economic growth in 2010 and 2015, respectively. This leads to FDI multipliers of 0.87 and 1.04 in the two years indicating higher domestic consumption in the latter. We find that utilities, transportation, financial services, accommodation and food, as well as the construction sector are boosted by the mining FDI. We also look into the determinants of FDI. We find that the global commodity prices directly affect investment from abroad. However, Mongolia cannot control the price fluctuations. Therefore, other determinants such as government policies and overall investment climate are of greater importance from an institutional perspective. We compare Mongolia with several other resource-rich countries along institutional parameters. Our finding confirms that Mongolia’s poor performance on policy and institutional dimension is a major impediment for FDI inflow. Improvements in the investment climate will also be beneficial for attracting foreign investment into the non-mining sectors, thus contributing to economic diversification.
Third, the Mongolian economy has already successfully entered interesting niche markets abroad, including in promising services such as engineering services for the mining industry. Mongolia’s geographical location, often seen as a millstone holding the country back, places it on the doorstep of the world’s most dynamic large economy of the last 30 years. This creates unending economic possibilities and opportunities. Further efforts are needed to capitalize on these advantages through a long-term regional cooperation and integration strategy. Diversification is an important part of the strategy, but it will take time and should be complemented by other policies, including xii Foreword macroeconomic policies that can reduce Mongolia’s vulnerability to fluctuations in commodity prices in the short run. Diversification can only succeed if the government facilitates international trade. Export and import procedures need to be further simplified. In order to meet international standards, firms need to have better access to internationally accredited laboratories. ADB has been supporting those activities, most recently by modernizing border crossing points and strengthening laboratory standards. These efforts will help to ease trade and give large and small firms the opportunity to access foreign markets more easily.
Mongolia is a landlocked resource-rich developing country. Mineral wealth brings vast economic opportunities, but also creates issues, high dependence on these resources being one of the main problems. The share of the mining sector in the total exports grew consistently since 2000, leading to increased dependency as high as 92% in 2012. In light of these developments, policy making has been concerned with the need to diversify the economy. There is a growing realization that more aggressive export promotion is needed in the non-mining sectors. The government recently proclaimed export-led growth to be the development priority and took first steps toward national export-promotion policies. However, these policies thus far have not been cohesive. In the last decade or so, the foreign trade function shifted several times from one ministerial portfolio to another. There are also several international players that undertake uncoordinated efforts in export promotion with varying success. The policies thus far concentrated on more traditional financial measures. In 2012-2015, the government undertook series of fiscal measures, including concessional loans to exporters and VAT exemption on some export products. These programs largely dried up since 2016 when the economy took a dip. The effect of financial incentives is unclear at best. At the same time, studies show that the general business and trade environment in Mongolia is not favorable, with numerous hurdles faced by exporters in complying with government regulations. Government’s non-financial efforts in easing trade have been limited. For instance, the “single window service” for exporters is still not completed after several years being in the making. We stress the importance of improving the general legal environment to boost exports. Of particular importance is also the improvement of export services including marketing, quality certifications, liaison, etc. The latter could be provided by both the government and non-government agencies.
Narantuya Chuluunbat, gave the final concluding address, summarising the important themes featured by the other presenters during the conference, while integrating this with her own observations about the current economic situation surrounding current cultural heritage implications in Mongolia. She looks at the potential for developing non-mining sectors for long-term sustainable development, with a special focus on the rich cultural heritage of Mongolia.
