Measuring the technical efficiency of Thai manufacturing SMEs: A comparison of parametric and non-parametric approaches

This study applies stochastic frontier analysis (SFA) and data envelopment analysis (DEA) approaches to measure and explain the technical efficiency of Thai manufacturing SMEs in 2007. The empirical results from both SFA and DEA revealed that the overall simple average technical efficiency in 2007 is relatively low, which can potentially reduce their output contribution. Therefore, specific policies are required to improve the technical efficiency of SMEs and these include easier access to financial services, credit facilities, equity in terms of the political operation, educational system, extensive infrastructural development, and technological upgrading, marketing and management.