- Title
- International Competition Enhance Capacity Utilisation: The Evidence from Indonesia, Philippines and Vietnam
- Creator
- Pidani, Rita R.; Mahmood, Amir
- Relation
- Insights into Economics and Management p. 88-101
- Publisher Link
- http://dx.doi.org/10.9734/bpi/ieam/v11/9052D
- Publisher
- B.P. International
- Resource Type
- book chapter
- Date
- 2021
- Description
- This paper explores the relationship between capacity utilisation and international market competition using firm-level data from Indonesia, Philippines, and Vietnam, looking for the possibility of efficient firms self-selecting rather than learning-by-exporting to join foreign markets. Capacity utilization has emerged as a rationale for these short-lived productivity improvements. Estimating both linear and quadratic models on an unbalanced variance of exporting and non-exporting firms shows that the impact of foreign market competition on capacity utilisation is following a curvilinear relationship with a diminishing marginal point as a constraint for further expansion. The capacity utilisation rate higher in the non-exporting group not only emphasizes a strong domestic market orientation of firms at large but also indicates the selection of learning-by-exporting entry mode by exporter SMEs in these countries. The influence of firm and industry physiognomies on a firm's capacity utilisation is further explored in the paper, which finds that wage productivity, competition, firm size, and legal structure all have linearly positive and capacity-based effects. The findings consistently emphasise the importance of capacities, competitiveness, and institutional performance in promoting SMEs' development.
- Subject
- capacities; competitiveness; institutional performance; growth; quantitative
- Identifier
- http://hdl.handle.net/1959.13/1484585
- Identifier
- uon:51378
- Identifier
- ISBN:9789391215187
- Language
- eng
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