Determinants of the Impact of AEC on SMEs’ Performance in Lao PDR

There is a recognition of 99% of economic enterprises in the Lao People’s Democratic Republic (PDR) is small-and medium- size enterprise (SMEs) and 94% of employment. It is crucial that strengthening the competitiveness of SMEs in the Lao PDR as to sustainably develop localisation and identity of Laos to fulfil the needs of generalised systems of preferences certificate of origin. The Logit Model was employed to examine the impact of trade liberalization including the World Trade Organization (WTO) and ASEAN Economic Community (AEC) on SMEs performance. In addition, the second objective of this study is to investigate the factors affect the SMEs performance. The result shows that AEC awareness has significant impact on SMEs performance. In addition, there are various factors affect SMEs performance. Therefore, Lao government should promotion of implementation of AEC.