Causal Variables Affecting Rural Industry Outsourcing In Northeast Thailand

Abstract

The purpose of this research was to study causal variables affecting outsourcing of rural industry management in northeast Thailand. This study focused on entrepreneurs in small and medium enterprises in the manufacturing sector. A path analysis technique with multiple regression method was used as a tool to analyze the influence of factors in rural industry outsourcing. According to the analysis, we found three factors directly affecting rural industry outsourcing management: (1) cost of production, (2) facilities of management and production efficiency and (3) potential for subcontracting. We also found that rural industry outsourcing management was indirectly influenced by two additional factors: (1) government policies and law, and (2) the environment of the outsourcing area. A coefficient of determination of R² = 0.244 and Durbin-W Aston = 1.936 were obtained in the study.