Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322378 
Year of Publication: 
2025
Series/Report no.: 
ADB Economics Working Paper Series No. 785
Publisher: 
Asian Development Bank (ADB), Manila
Abstract: 
Understanding the business environment and structural issues that limit growth is critical when designing an effective national policy framework for private sector development-especially for micro, small, and medium-sized enterprises (MSMEs). Given the limited MSME data available, this paper employs probabilistic principal component analysis to develop a new way to quantitatively assess what affects MSME development nationally, by using granular firm-level panel data for 49,565 MSMEs in Thailand as a case study. The estimation results found a potential disproportionate effect of MSME policy interventions during and after the coronavirus disease pandemic. Government assistance for MSMEs likely helped Bangkok-based firms ease the negative pandemic effects, especially in manufacturing. However, it did not help local MSMEs- regardless of sector-as their operational performance deteriorated both during and after the pandemic. This underscores the importance of using a focused approach when designing policies for MSME development to facilitate more sustainable, resilient private sector growth.
Subjects: 
SME development
access to finance
financial inclusion
SME policy
probabilistic principal component analysis
Thailand
JEL: 
D22
G20
L20
L50
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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