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Firm Characteristic Determinants of SME Participation in Production Networks

Author

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  • 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.

Suggested Citation

  • Charles HARVIE & Dionisius NARJOKO & Sothea OUM, 2010. "Firm Characteristic Determinants of SME Participation in Production Networks," Working Papers DP-2010-11, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2010-11
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    References listed on IDEAS

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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. Medalla, Erlinda M. & Mantaring, Melalyn C., 2017. "Mainstreaming SMEs: Promoting Inclusive Growth in APEC," Discussion Papers DP 2017-49, Philippine Institute for Development Studies.
    2. Ganeshan Wignaraja, 2012. "Engaging Small and Medium Enterprises in Production Networks : Firm-level Analysis of Five ASEAN Economies," Trade Working Papers 23316, East Asian Bureau of Economic Research.
    3. Cassey Lee & Dionisius Narjoko, 2015. "Escaping the Middle-Income Trap in Southeast Asia: Micro Evidence on Innovation, Productivity, and Globalization," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 124-147, January.
    4. Agné Paliokaité, 2010. "Networking as a Route for Corporate Foresight in SMEs," IET Working Papers Series 10/2010, Universidade Nova de Lisboa, IET/CICS.NOVA-Interdisciplinary Centre on Social Sciences, Faculty of Science and Technology.
    5. Ganeshan Wignaraja & Jens Krüger & Anna Mae Tuazon, 2013. "Production Networks, Profits, and Innovative Activity : Evidence from Malaysia and Thailand," Microeconomics Working Papers 23391, East Asian Bureau of Economic Research.
    6. 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).
    7. Albert, Jose Ramon G. & Llanto, Gilberto M. & Serafica, Ramonette B. & Vizmanos, Jana Flor V. & Bairan, Jose Carlos Alexis C. & Quimba, Francis Mark A., 2017. "Measuring and Examining Innovation in Philippine Business and Industry," Discussion Papers DP 2017-28, Philippine Institute for Development Studies.
    8. Yothin Jinjarak & Paulo Jose Mutuc & Ganeshan Wignaraja, 2014. "Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms," Trade Working Papers 24047, East Asian Bureau of Economic Research.
    9. Ganeshan Wignaraja, 2014. "Joining the supply chain: a firm-level perspective," Chapters,in: A World Trade Organization for the 21st Century, chapter 4, pages 71-109 Edward Elgar Publishing.
    10. Anthony Abiodun Eniola & Harry Entebang, 2015. "Government Policy and Performance of Small and Medium Business Management," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(2), pages 237-248, February.
    11. 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).
    12. Arudchelvan, Menaka & Wignaraja, Ganeshan, 2015. "SME Internationalization through Global Value Chains and Free Trade Agreements: Malaysian Evidence," ADBI Working Papers 515, Asian Development Bank Institute.
    13. Ganeshan Wignaraja, 2015. "Factors Affecting Entry into Supply Chain Trade: An Analysis of Firms in Southeast Asia," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(3), pages 623-642, September.
    14. Li, Kui-Wai, 2015. "Analyzing the TFP Performance of Chinese Industrial Enterprises," MPRA Paper 67844, University Library of Munich, Germany.

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