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Thai manufacturing small and medium sized enterprises (SMEs) face intense competition in domestic and foreign markets. Given their importance to the economic development of the country it is important to have a clear understanding of their readiness to face the rigors of international competition, including the barriers and specific problems that they face. This study uses a stochastic frontier analysis (SFA)

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A major motivation of this study is to examine the factors that are the most important in contributing to the relatively poor efficiency performance of Thai manufacturing small and medium sized enterprises (SMEs). The results obtained will be significant in devising effective policies aimed at tackling this poor performance. This paper uses data on manufacturing SMEs in the Northeastern region of Thailand in 2007 as a case study, by applying a stochastic frontier analysis (SFA) and a technical inefficiency effects model. The empirical results obtained indicate that the mean technical efficiency of all categories of manufacturing SMEs in the Northeastern region is 43%, implying that manufacturing SMEs have high levels of technical inefficiency in their production processes. Manufacturing SMEs in the Northeastern region are particularly labour-intensive. The empirical results of the technical inefficiency effects model suggest that skilled labour, the municipal area and ownership characteristics are important firm-specific factors affecting technical efficiency. The paper argues that the government should play a more substantial role in developing manufacturing SMEs in the Northeastern provinces through: providing training programs for employees and employers; encouraging a greater usage of capital and technology in the production process of SMEs; enhancing the efficiency of stateowned enterprises; encouraging a wide range of ownership forms; and improving information and communications infrastructure.

Purpose The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos. Design/methodology/approach The authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests. Findings The results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism. Social implications The empirical results and policy recommendation may be useful for other small developing countries. Originality/value This study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.