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

Teerawat Charoenrat and Charles Harvie

Economic Modelling, 2014, vol. 43, issue C, 372-393

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.

Keywords: Technical efficiency; Stochastic frontier production function; Technical inefficiency effects model; Small and medium sized enterprises; Manufacturing (search for similar items in EconPapers)
JEL-codes: C21 N6 R3 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999314003198
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:43:y:2014:i:c:p:372-393

DOI: 10.1016/j.econmod.2014.08.009

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().