Determinants of Export Participation: Evidence from Thai Manufacturing Small and Medium-Sized Enterprises

Abstract

This paper empirically examines firm-specific factors that could affect the export participation
of 65,111 Thai manufacturing SMEs. Three limited, dependent variable models (the probit
model, the logit model and the linear probability model) were used to check the sensitivity of
the results. With respect to the determinants that affect a firm’s export decision, a number of
factors such as i) firm size, ii) productivity, iii) government assistance, iv) foreign investment
(ownership), v) firm location (municipal or non-municipal area), vi) research and
development, vii) firm age, and viii) workforce skill levels were found to be significantly and
positively correlated with the export participation of Thai manufacturing SMEs. Beyond a
certain threshold firm size, SME export decisions were found to have a significant and positive
non-linear correlation. A significant and negative non-linear relationship between a firm’s age
and its export decision, however, was found in the aggregate. Twenty-three sub-manufacturing
sectors, classified into eight sub-manufacturing SME groups, were also investigated.
Empirically evidence-based policies were also suggested to facilitate improvement the
international competitiveness of Thai manufacturing SMEs in export markets.