Joining the Supply Chain: A Firm-Level Perspective from Southeast Asia

June 1, 2014

This paper undertakes a comparative, firm-level analysis of joining the supply chain in five Southeast Asian economies to improve understanding of fragmentation of manufacturing across borders. The findings suggest that firm size (reflecting economies of scale to overcome entry costs) matters for joining supply chains with large firms playing the dominant role in Southeast Asian economies. The paper suggests that governments can facilitate small- to medium-sized enterprises (SMEs) joining supply chains through a market-oriented strategy for SMEs, modern physical infrastructure, streamlined bureaucratic procedures, and good quality business support services.