ABSTRACT
The unsatisfactory growth performance of small- and medium-scale industries (SMI) in most Association of Southeast Asian Nations (ASEAN) countries calls for a more rigorous analysis of the contributions which establishments of different size can make to various objectives of economic development such as employment, output, and income generation. Among ASEAN countries, the manufacturing sector of Indonesia is the most heterogeneous in terms of establishment characteristics. Size-specific structural heterogeneity is hardly less pronounced in the Philippines than in Indonesia. Capital intensity increases with plant size, although the change in factor proportions is less marked in Malaysia and Singapore than in the Philippines and Thailand. Compared with both Indonesia and the Philippines, the Malaysian manufacturing sector is far less heterogeneous with respect to its basic structural characteristics. Policy makers are interested in the SMI sector mainly because this sector is expected to generate additional employment opportunities and to be an efficient use of resources.
