Impact of inflation and Labor shortage on SMEs in Laos

Xoumphonphakdy Soudathip (2025) Impact of inflation and Labor shortage on SMEs in Laos. Pénzügyi és Számviteli Kar.

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Absztrakt (kivonat)

Small and Medium Enterprises (SMEs) form the backbone of the Lao economy, accounting for 99% of all registered businesses and contributing significantly to employment, income generation, and economic diversification. In recent years, however, SMEs in Laos have faced mounting pressure from persistent inflation and widespread labor shortages two interconnected macroeconomic challenges that threaten their financial performance, operational capacity, and long-term sustainability. This study investigates the dual impact of these pressures, the strategies SMEs employ to cope and adapt, and the effectiveness of current government support in mitigating these challenges.Using a mixed-methods sequential explanatory design, the research collected quantitative data from 175 SMEs across key sectors and regions, followed by ten semi-structured interviews to contextualize and deepen the analysis. The findings reveal that nearly 60% of SMEs experienced severe or extremely severe effects from inflation, particularly through rising input costs, declining customer purchasing power, and tightening cash flows. Meanwhile, 88.1% of respondents reported moderate to severe labor shortages driven by outward migration, skills mismatches, and rising wage expectations. These pressures interact, reinforcing one another and creating a cycle of reduced productivity, increased operational costs, and constrained investment capacity.SMEs adopted a diverse range of adaptation strategies. Short-term coping mechanisms included price adjustments, cost reduction, supplier renegotiation, and temporary labor adjustments. Long-term strategies focused on technological adoption, workforce training, diversification, and market repositioning—approaches found to be more strongly associated with resilience and performance recovery. However, limited access to affordable finance, incomplete information, and administrative barriers hindered the implementation of long-term strategies. Although many SMEs were aware of government support programs, only a minority accessed them, citing procedural complexity, insufficient communication, and lack of targeted assistance.The study concludes that SME resilience in Laos depends on firm-level capabilities, theinstitutional support structures, and coordinated policy environments. It proposes a comprehensive resilience framework based on capability development, improved policy accessibility, and coordinated cross-sector support. The research provides evidence-based recommendations for SME managers and policymakers, highlighting the need for simplified financing mechanisms, strengthened vocational training, digitalized public services, and sector-specific support programs. By addressing both structural barriers and strategic gaps, Laos can foster a more resilient, competitive, and sustainable SME sector capable of withstanding future economic challenges.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Pénzügyi és Számviteli Kar

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Pénzügy és Számvitel

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	economics, gazdasági elemzés, inflation, infláció, kis- és középvállalkozás - KKV, labor shortage, Laos, Laosz, SMEs
SWORD Depositor:	User Archive
Felhasználói azonosító szám (ID):	User Archive
Rekord készítés dátuma:	2026. Júl. 09. 11:07
Utolsó módosítás:	2026. Júl. 09. 11:07

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