Analysis on the Credit Accessibility and Growth of Manufacturing Firms in the Cases of Indonesia, Philippines, and Vietnam

• Main Authors: Jimenez, Sophia Angela, Daquinag, Kamille, Sagrit, Maria Regina Victoria, Chan, Brian Irvin, Lamberte, Albert, Rapada, Maria Zunally, Yu, Krista Danielle
• Format: text
• Published: Animo Repository 2023
• Subjects: Philippines; MSME; Economic Policies; Economic Growth; Entrepreneurial and Small Business Operations; Growth and Development
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/186; https://animorepository.dlsu.edu.ph/context/res_aki/article/1179/viewcontent/DLSU_AKI_Policy_Brief__2023_12_014.pdf
• Institution: De La Salle University

Micro, small, and medium enterprises (MSMEs) contribute to income and employment generation, poverty reduction, and industry growth in the ASEAN region (Mendoza, 2015). Their significant contributions to economies have led countries to emphasize the importance of firm growth, which is influenced by credit accessibility. Majority of existing enterprises in Indonesia, the Philippines, and Vietnam are composed of MSMEs with limited financial resources to foster growth (Paratama, 2019). This hinders the potential of manufacturing MSMEs to have sufficient funding. However, existing literature suggests that credit access significantly provides a positive impact on firm growth only until a certain threshold point (Nizam et al., 2020). The threshold regression analysis results convey the significance of considering the potential existence of credit access thresholds, particularly with regard to firm size. This policy brief aims to provide a suggestive analysis by assessing the applicability of the established relationship and threshold levels to existing economic policies and the formulation of future programs.