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Micro-, Small- and Medium-Sized Enterprises (MSMEs): Challenges, Opportunities and Sustainability in East Asia

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Trade Logistics in Landlocked and Resource Cursed Asian Countries

Abstract

By its very nature the resource sector tends to be relatively capital intensive and dominated by large state-owned or foreign-owned multinational enterprises that generate relatively few jobs. In this context micro-, small- and medium-sized enterprises (MSMEs) have a critical role to play in generating jobs, diversifying the economic base and spreading the economic benefits of resource production in resource abundant economies such as that of the Lao People’s Democratic Republic (Lao PDR). To achieve this requires a new MSMEs growth and business strategy focusing on: capacity building through knowledge and skills acquisition, technology upgrading, improved product quality and competitiveness, innovation, and entrepreneurial activity.

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Notes

  1. 1.

    See Davis, Haltiwanger and Schuh (1993) and Hallberg (2000) for a useful critique on the contribution of small- and medium-sized enterprises (SMEs) in these areas.

  2. 2.

    Association of Southeast Asian Nations.

  3. 3.

    See also Harvie (2015).

  4. 4.

    The ASEAN Economic Community (AEC) started in December 2015 and represents a major milestone in the attainment of regional economic integration in the context of the ten ASEAN member countries. The AEC forms a market of over 622 million people valued at US$2.6 trillion (in 2014), making it the third largest economy in Asia and the seventh largest in the world. It aims to achieve the free flow of goods, services, investment, and freer flow of capital, equitable economic development, and reduced poverty and socioeconomic disparities by 2020.

  5. 5.

    In this context, China’s so-called Belt and Road initiative, which is a development strategy involving infrastructure development (via road, rail and port facilities) and investments in countries across Europe, Asia and Africa, has the aim of enhancing regional connectivity and could be very important. This could potentially carry benefits for many developing economies involved in this initiative, and in particular for landlocked countries such as Laos.

  6. 6.

    For a more comprehensive discussion of this issue, see Harvie et al. (2015).

  7. 7.

    Occurs where MSME demand for credit is greater than the supply of credit to them (Harvie et al., 2015).

  8. 8.

    The research methodology adopted a structured survey of MSMEs conducted in eight East Asian countries (Cambodia, China, Indonesia, Laos, Malaysia, the Philippines, Thailand and Vietnam). The survey collected information on MSME characteristics, sources and usage of finance. A usable sample of 1055 MSMEs was obtained containing information on the basic characteristics of the sample of firms (size, age, ownership type, cost and input structure, performance (e.g. participation in production networks, sales, sales growth, profit rate), sources of finance and usage, innovation capability and managerial background). For more details, see Harvie et al. (2015).

  9. 9.

    The data used in this study was obtained by means of a structured questionnaire survey conducted in seven ASEAN countries (Thailand, Indonesia, Malaysia, Philippines, Vietnam, Cambodia and Lao PDR) and China. Some 780 usable MSME samples were obtained. The questionnaire aimed at collecting information on SME characteristics, and the perceptions of their managers of the factors that constrain MSME growth.

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Authors and Affiliations

  1. School of Accounting, Economics & Finance, University of Wollongong, Wollongong, NSW, Australia

    Charles Harvie

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  1. Charles Harvie
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Correspondence to Charles Harvie .

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Editors and Affiliations

  1. School of Accounting, Economics & Finance, University of Wollongong, Wollongong, NSW, Australia

    Kankesu Jayanthakumaran

  2. School of Information, Systems and Modelling, Faculty of Engineering and Information Technology, University of Technology Sydney, Sydney, NSW, Australia

    Nagesh Shukla

  3. School of Accounting, Economics & Finance, University of Wollongong, Wollongong, NSW, Australia

    Charles Harvie

  4. UN House, International Think Tank for LLDCs, Ulaanbaatar, Mongolia

    Odbayar Erdenetsogt

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Harvie, C. (2019). Micro-, Small- and Medium-Sized Enterprises (MSMEs): Challenges, Opportunities and Sustainability in East Asia. In: Jayanthakumaran, K., Shukla, N., Harvie, C., Erdenetsogt, O. (eds) Trade Logistics in Landlocked and Resource Cursed Asian Countries . Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-6814-1_7

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  • DOI: https://doi.org/10.1007/978-981-13-6814-1_7

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