Factors affecting the export participation and performance of Thai manufacturing small and medium sized Enterprises (SMEs)

This paper employed the 2007 Thai Industrial Census to empirically examine the effects of firm-specific and industry factors on a firm’s decision to export and the export performance of 65,111 Thai manufacturing SMEs which are classified into eight submanufacturing groups. Six econometric models are indentified to capture linear and nonlinear effects of firm-specific factors as well as to analyze each industry effect for Thai manufacturing SMEs. Four limited dependent variable models (i.e., the probit model, the logit model, the linear probability model, and the Tobit model) are used to study the factors affecting a firm’s export decision and its export performance. Estimation techniques were used to check the statistical confidence of the results for this study. With regards to firmspecific factors which exert an influence on a firm’s decision to export and its export performance, firm size, firm age, and labour productivity, government assistance, foreign investment (ownership), municipal location, research and development, and skilled labour were found to be significantly and positively related to a firm’s export participation and its export performance. Significant and negative non-linear results were also found for firm size, firm age, and labour productivity in this study. Focusing on the effects of industry sectors on a firm’s decision to export and its export performance, producer concentration was found to have a significant and positive effect on a firm’s export decision and its export performance but a significant and negative result was found for the capital - labour ratio. Finally, evidence-based policies are provided to facilitate improvement in the international competitiveness of Thai manufacturing SMEs and in their export performance.