The determinants of SMEs' market share in 1991 - Taiwan manufacturers

Small and medium-sized enterprises (SMEs) have become increasingly popular in recent decades, having caused concern among scholars of various areas. O ur line of research focuses on the determinants of SMEs' market share. This study explores the topic base on Taiwan's manufacturers' data collected in 1991. Our empirical results indicate that Taiwan has witnessed SMEs becomi ng prosperous in manufacturing industries with higher relative labor produc tivity, low entry barriers, prosperous subcontracting activities, and young ages. Our results indicate that, in the transitory process of industrial d evelopment, Taiwan's SMEs no longer can afford high wage payments when at t he same time the quality of labor does not increase accordingly. As Taiwan approaches the status of a developed economy, the beneficiaries of export a ctivities have changed. Unlike 1986, in 1991 there was a smaller share of S MEs in Taiwan's export oriented industries. Furthermore, SMEs benefited fro m their efforts to increase their automation status. The emphasis on issues concerning environmental protection proved to be another source of entry b arrier that kept SMEs from prospering. Certain similarities arise when comp aring our conclusions with those of the U.S., Canada, Germany, and Japan, a ll of whom represent industrialized countries. We can conclude that as Taiw an matures in her industrial development process, SMEs also struggle to a c ertain maturity in theirs.