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Firm Characteristic Determinants of SME Participation in Production Networks

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Author Info

  • Charles HARVIE

    (Centre for Small Business and Regional Research School of Economics, University of Wollongong, Australia)

  • Dionisius NARJOKO

    (Economic Research Institute for ASEAN and East Asia (ERIA))

  • Sothea OUM

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

This paper provides an empirical analysis of small and medium enterprise (SME) participation in production networks. It gauges firm characteristic determinants of SME participation in production networks. The empirical investigation utilizes results obtained from an ERIA Survey on SME Participation in Production Networks, conducted over a three month period at the end 2009 in most ASEAN countries (i.e., Thailand, Indonesia, Malaysia, Philippines, Vietnam, Cambodia, and Laos PDR) and China. The results suggest that productivity, foreign ownership, financial characteristics, innovation efforts, and managerial/entrepreneurial attitudes are the important firm characteristics that determine SME participation in production networks. The paper extends the analysis to identify the determinants that allow SMEs to move from low to high quality or value adding participation in production networks. The results suggest that size, productivity, foreign ownership, and, to some extent, innovation efforts and managerial attitudes, are the important firm characteristics needed by SMEs to upgrade their positions in production networks. The finding suggests that SMEs really exploit competitiveness from economies of scale only when they are able to engage in production networks.

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Bibliographic Info

Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2010-11.

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Length: 52 pages.
Date of creation: 01 Oct 2010
Date of revision:
Handle: RePEc:era:wpaper:dp-2010-11

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  1. Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August.
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Cited by:
  1. OUM Sothea & Narjoko Dionisius & Charles HARVIE, 2014. "Constraints, Determinants of SME Innovation, and the Role of Government Support," Working Papers DP-2014-10, Economic Research Institute for ASEAN and East Asia (ERIA).
  2. Jinjarak, Yothin & Mutuc, Paulo Jose & Wignaraja, Ganeshan, 2014. "Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms," ADBI Working Papers 470, Asian Development Bank Institute.
  3. Takeshi Fujimoto & Shochiro Hara & Fukunari Kimura, 2010. "Comprehensive Asia Development Plan and Beyond -Growth Strategies for More Prosperous and Equitable East Asia-," Working Papers PB-2010-02, Economic Research Institute for ASEAN and East Asia (ERIA).
  4. Agné Paliokaité, 2010. "Networking as a Route for Corporate Foresight in SMEs," IET Working Papers Series 10/2010, Universidade Nova de Lisboa, IET/CESNOVA-Research on Enterprise and Work Innovation, Faculty of Science and Technology.
  5. Wignaraja, Ganeshan & Krüger, Jens & Tuazon, Anna Mae, 2013. "Production Networks, Profits, and Innovative Activity: Evidence from Malaysia and Thailand," ADBI Working Papers 406, Asian Development Bank Institute.
  6. Wignaraja, Ganeshan, 2012. "Engaging Small and Medium Enterprises in Production Networks: Firm-level Analysis of Five ASEAN Economies," ADBI Working Papers 361, Asian Development Bank Institute.

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