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The Performance of Thai Manufacturing SMEs: Data Envelopment Analysis (DEA) Approach

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  • Teerawat Charoenrat
  • Charles Harvie

Abstract

This study applies a data envelopment analysis (DEA) approach and a two-limit Tobit model to measure the technical efficiency of Thai manufacturing small and medium enterprises (SMEs) and examine firm-specific factors contributing to it by using firm-level industrial censuses data in 1997 and 2007. The empirical results reveal that the overall average technical efficiency is relatively low, which can potentially reduce their output contribution. Empirical results also indicate that firm size, firm age, skilled labour, location, type of manufacturing ownerships, cooperatives, foreign investment and exports are important firm-specific factors contributing to the technical efficiency of Thai manufacturing SMEs. 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.

Suggested Citation

  • Teerawat Charoenrat & Charles Harvie, 2017. "The Performance of Thai Manufacturing SMEs: Data Envelopment Analysis (DEA) Approach," Global Business Review, International Management Institute, vol. 18(5), pages 1178-1198, October.
    • Handle: RePEc:sae:globus:v:18:y:2017:i:5:p:1178-1198
    DOI: 10.1177/0972150917710346
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    3. Gkouzos, Andreas, 2022. "The efficiency of basic economic branches in Greek regions: Evidence from Data Envelopment Analysis," MPRA Paper 112310, University Library of Munich, Germany.
    4. Lamees Al-Durgham & Mohammad Adeinat, 2021. "Assessing the Relative Efficiency for Listed Manufacturing Firms in Jordan Using Data Envelopment Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 11(1), pages 135-139.
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    6. Teerawat Charoenrat & Piriya Pholphirul, 2022. "The Industrial Sector Participation in Global Value Chains for Sustainable Development of the Greater Mekong Subregion (GMS)," Global Business Review, International Management Institute, vol. 23(3), pages 608-640, June.
    7. Gusman Nawanir & Yudi Fernando & Lim Kong Teong, 2018. "A Second-order Model of Lean Manufacturing Implementation to Leverage Production Line Productivity with the Importance-Performance Map Analysis," Global Business Review, International Management Institute, vol. 19(3_suppl), pages 114-129, June.

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