Promoting exports by the ASEAN SMEs

Abstract

Taking into consideration that exporting activities are often associated with foreign direct investment and global value chains, this chapter looks at the impediments, drivers, and conducive policies in internationalizing small and medium-sized enterprises (SMEs) in developing countries. Access to export markets often signifies higher productivity and competitiveness, leading to firm survivability. Using the World Bank Enterprise Surveys of eight countries in ASEAN, this chapter introduces the export experiences of these eight ASEAN countries in comparison to those of the East Asian economies, focusing on the SMEs’ shares in total employment, exports, and GDP. The need for higher export performance by the ASEAN SMEs is discussed. This chapter analyzes the dynamic changes in the impediments faced by ASEAN firms, separately by country and firm size. The issue is discussed in the context of internal factors (firm characteristics, access to finance, ICT) and external factors (trade facilitation, real effective exchange rate, policies conducive to SME promotion) that may influence exporting activities of SMEs. The chapter then introduces key results obtained from regression analyses on the drivers of SMEs’ exporting activities. Regression analyses are also conducted by firm size (SMEs and large firms) and by selected key sectors. The chapter concludes with policy implications from the study findings.