Firm Productivity, Globalization and Global Product Sharing: Lesson from Thai Manufacturing

This paper examines productivity determinants across firms in Thai manufacturing, using the 2006 industrial census. The main focus is to gain better understanding twoindustry-specific variables highly policy relevant, trade policy and global production networks. Our key finding is that while firm-specific variables such as years of operation, R&D activities, a number of skill workers employed have positive effect on productivity, modes in which firms are integrated into the global economy like market orientation and foreign partnership positively attribute to their productivity. Firms operating in more restrictive trade policy register lower productivity than those in more liberal environment. The negative effect much higher for large firms perhaps due to presence of water-in-tariff occurring among small and medium firms. Different types of production network might have different effect. It is producer-driven network that have positive effect on productivity only the small firm sample. When firm size exceeds 110 and 125 workers, the effect on productivity is not different from zero. By contrast, firms participating in buyer-driven networks tend to have lower productivity, regardless their size.