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The efficiency of SMEs in Thai manufacturing: a stochastic frontier analysis

Journal Article


Abstract


  • This study examines the technical efficiency of Thai manufacturing SMEs and their firm-specific determinants utilising firm-level industrial census data for 1997 and 2007. Results from a stochastic frontier production function and technical inefficiency effects model reveal that Thai SMEs are overwhelmingly labour intensive with low average technical efficiency in both years. Results also indicate that firm size, firm age, skilled labour, location, type of firm ownership, government assistance, foreign investment and export activity are important firm-specific factors contributing to the technical efficiency of SMEs. Specific policies are warranted to improve Thai SMEs. These policy measures include: easier access to financial services, access to skilled labour, training of the workforce and entrepreneurs, addressing location and regional capacity inequities, encouraging foreign investment for operational synergies and export incentives for penetration in the world market.

UOW Authors


Publication Date


  • 2014

Citation


  • Charoenrat, T. & Harvie, C. (2014). The efficiency of SMEs in Thai manufacturing: a stochastic frontier analysis. Economic Modelling, 43 372-393.

Scopus Eid


  • 2-s2.0-84907554370

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/543

Has Global Citation Frequency


Number Of Pages


  • 21

Start Page


  • 372

End Page


  • 393

Volume


  • 43

Place Of Publication


  • Netherlands

Abstract


  • This study examines the technical efficiency of Thai manufacturing SMEs and their firm-specific determinants utilising firm-level industrial census data for 1997 and 2007. Results from a stochastic frontier production function and technical inefficiency effects model reveal that Thai SMEs are overwhelmingly labour intensive with low average technical efficiency in both years. Results also indicate that firm size, firm age, skilled labour, location, type of firm ownership, government assistance, foreign investment and export activity are important firm-specific factors contributing to the technical efficiency of SMEs. Specific policies are warranted to improve Thai SMEs. These policy measures include: easier access to financial services, access to skilled labour, training of the workforce and entrepreneurs, addressing location and regional capacity inequities, encouraging foreign investment for operational synergies and export incentives for penetration in the world market.

UOW Authors


Publication Date


  • 2014

Citation


  • Charoenrat, T. & Harvie, C. (2014). The efficiency of SMEs in Thai manufacturing: a stochastic frontier analysis. Economic Modelling, 43 372-393.

Scopus Eid


  • 2-s2.0-84907554370

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/543

Has Global Citation Frequency


Number Of Pages


  • 21

Start Page


  • 372

End Page


  • 393

Volume


  • 43

Place Of Publication


  • Netherlands