Analysis of the roles of the stock exchange of Thailand on Thai agri-business sector's growth
1996
Rungthip Sukkumnoed
Although the credits for agribusiness sector have increased every year, some agribusiness firms have limited accessibility to credit resulting from the policies of financial institutions and risks and uncertainties in agribusiness operation. Moreover, they have had to challenge the unstability of money market, so some of them have paid attention to capitalize in capital market, The Stock Exchange of Thailand (SET). Objective of this research is to study the roles of SET on agribusiness firms capitalizing in SET in comparison to those which are not capitalizing in SET. This study uses data from 33 firms engaged in 3 kinds of agribusiness including animal feed. vegetable and fruit processing and sea food processing business. SET playing a key role of capitalization to agribusiness in SET of 4,132 million baht in 1994, was the first finding of this study. Furthermore, it found that agribusiness firms in SET, animal feed and sea food processing business, have more liquidity and leverage than they had in the past and they have more liquidity, leverage, profitability and economy of scale than other firms in their business. Vegetable and fruit processing was in the same status but not significantly different. However, the differences obtained are caused by the investment planning and the structure of their own business. It is the concluded that the capitalization in SET has significantly supported agribusiness firm to improve financial liquidity and stability in 2 main effects determinating the competitiveness of their own firm. Therefore it is possibly expected that these benefits will support the agribusiness sector growth and stability. However, the capability of management do not relate directly with capitalization in SET. If the agribusiness firms in SET can manage their own firms better than they do now, they will have more competitiveness.
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