Factors Affecting Technical Efficiencyon Micro, Small, and Medium Enterprises in Lao PDR
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The study of factors affecting the technical efficiency of Micro, Small, and Medium Enterprises (MSMEs) in Lao PDR aimed to analyze the technical efficiency and the factors influencing it, using data from 349 MSMEs. The analysis using Data Envelopment Analysis (DEA) revealed that 82.52% of MSMEs had the lowest level of technical efficiency, ranging from 0.0000 to 0.2000 (or 0.00% to 20.00%). This surprisingly low efficiency indicates a significant potential for improvement. The analysis of factors influencing technical efficiency revealed that capital, business owner’s education level, and the use of mobiles for management all significantly affected the technical efficiency of MSMEs. Addressing these key issues could enable MSMEs in Lao PDR to increase their technical efficiency, leading to better performance and competitiveness in the market.
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