Sustaining Growth and Performance in East Asia
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Sustaining Growth and Performance in East Asia

The Role of Small and Medium Sized Enterprises

Edited by Charles Harvie and Boon-Chye Lee

This third book in the series focuses on how small and medium sized enterprises (SMEs) contribute to achieving and sustaining growth and performance in their economies, as well as the ways in which governments can assist and enhance that contribution. This is of particular concern given the trauma suffered by East Asian economies in the wake of the financial and economic crisis of 1997–98.
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Chapter 6: The East Asian Financial Crisis in Thailand: Distress and Resilience of Local SMEs

Philippe Régnier


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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