Profitability and marketability efficiencies of manufacturers in the association of Southeast Asian Nations: A multi-stage empirical study : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

The Association of Southeast Asian Nations (ASEAN) is developing as an attractive, promising destination for manufacturing operations in Asia. Since the 2015 establishment of ASEAN Economic Community, which aims to become a resilient manufacturing and business centre, it has fostered the growth of manufacturers in ASEAN. The manufacturing sector has contributed extensively to the economic development of ASEAN nations. Notable recent positive statistics report the impressive performance and continuous development of manufacturing in most ASEAN countries. Despite the acknowledged contribution and potential growth of manufacturing in ASEAN nations, the profit-generating and market-value efficiencies of manufacturing enterprises in ASEAN are still debatable. This study applies the bootstrap two-stage data envelopment analysis (DEA) to investigate the profitability and marketability efficiencies of 899 listed manufacturers in six selected ASEAN countries (ASEAN-6): Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam from 2007 to 2018. The study uses panel-data fractional and Tobit regression models to examine the effects of corporate factors on the listed manufacturers’ profitability and marketability efficiencies across the ASEAN-6 countries. Though the fractional regression model is the most advantageous method for fractional response variables, the Tobit regression model is most widely used for evaluating efficiency determinants. The bootstrap two-stage DEA results show that Indonesian and Singaporean listed manufacturing attains relatively high average profitability efficiency. Conversely, Malaysia, the Philippines, Thailand, and Vietnam listed manufacturers’ profitability efficiency has considerable room for improvement. Marketability efficiency levels are significantly lower than profitability efficiency for most ASEAN-6 countries (exception, Malaysia). Singaporean listed manufacturers have the highest marketability efficiency scores, followed by Indonesia, Malaysia, Thailand, the Philippines, and Vietnam listed manufacturers. The empirical results from the regression models show diverse, significant impacts of corporate financial and non-financial factors on the profitability and marketability efficiencies of the listed firms in the ASEAN-6 countries’ manufacturing sector and sub-sectors (high-technology and traditional production sub-sectors).