Survival and Duration Analysis of MSMEs in Chiang Mai, Thailand: Evidence from the Post-COVID-19 Recovery

Woraphon Yamaka, Paravee Maneejuk (), Rungrapee Phadkantha, Wiranya Puntoon, Payap Tarkhamtham and Tatcha Sudtasan
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Woraphon Yamaka: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Paravee Maneejuk: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Rungrapee Phadkantha: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Wiranya Puntoon: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Payap Tarkhamtham: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand
Tatcha Sudtasan: Center of Excellence in Econometrics, Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand

Mathematics, 2023, vol. 11, issue 4, 1-21

Abstract: This study attempts to reveal the consequences of coronavirus disease 2019 (COVID-19) on micro, small, and medium enterprises (MSMEs) in Chiang Mai, Thailand. A total of 786 MSMEs were surveyed during May and August 2022, corresponding to the period when the recovery of businesses and livelihoods from the ongoing COVID-19 crisis became more perceptible. The perceptions of COVID-19’s impact on MSMEs and their survivability are explored and investigated. To achieve this goal, a copula-based sample selection survival model is introduced. This idea of the model is extended from the concept of the Cox proportional hazards model and copula-based sample selection model, enabling us to construct simultaneous equations—namely, the probability-of-failure equation (selection equation) and the duration-of-survival equation (time-to-event or outcome equation). Several copula functions with different dependence patterns are considered to join the failure equation and the duration-of-survival equation. By comparing the Akaike and Bayesian information criteria values of the candidate copulas, we find that Farlie–Gumbel–Morgenstern (FGM) copula performs the best-fit joint function in our analysis. Empirically, the results from this best-fit model reveal that the survival probability of MSMEs in the next year is around 80%. However, some MSMEs may not survive more than three months after the interview. Finally, our results also reveal that the tourism MSMEs have a lower chance of survival than the commercial and manufacturing MSMEs. Notably, the business size and the support schemes from the government—such as the debt restructuring process, the tax payment deadline extension, and the reduced social security contributions—exhibited a role in lengthening the survival duration of the non-surviving MSMEs.

Keywords: copula; duration; enterprises; post-COVID-19 recovery; survivability (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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