The Role of Small and Medium Sized Enterprises
Studies of Small and Medium Sized Enterprises in East Asia series
Edited by Charles Harvie and Boon-Chye Lee
Chapter 6: The East Asian Financial Crisis in Thailand: Distress and Resilience of Local SMEs
6. The East Asian ﬁnancial crisis in Thailand: distress and resilience of local SMEs Philippe Régnier 6.1 INTRODUCTION The East Asian crisis has led to various corporate restructuring processes, which create new opportunities for further linkages between OECD large and smaller ﬁrms, including transnational corporations (TNCs), and East Asian enterprises interested in global production through business networks (Meyanathan, 1994; Blomstrom and Kokko, 1998; World Bank, 1999). Local enterprises in East Asia do not always refer to heavily indebted conglomerates closely associated to local business and political elites (crony capitalism). They can also be dynamic or promising medium-sized ﬁrms, sometimes smaller, which have managed to develop before and survive throughout the East Asian crisis. They represent a signiﬁcant portion of all existing ﬁrms and jobs, of export revenues and of national GDP. They are extremely dynamic in a number of North-East Asian economies (Japan, Taiwan, Coastal China) and are playing an increasingly important role elsewhere (Korea, Indonesia, Malaysia, Singapore and Thailand) (Régnier, 1996, 1998). However, especially in this second category of countries, most SMEs lack technology, know-how and management skills, if not ﬁnancial capital (Jennings and Beaver, 1997). While their situation has been adversely aﬀected by the 1997–98 crisis (Régnier, 2000), new opportunities are emerging for developing not only proﬁtable but also sustainable linkages with OECD large or smaller business counterparts. Since 1998, UNCTAD (World Investment Reports, 1998, 1999, 2000) has focused on TNCs’ global linkages. In this context, this chapter discusses the issue...
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