Firm Performance in Cambodia: Key Drivers and Strategies from Survey Data
In early 2020, Covid-19 caused a global health crisis which
drastically limited human interactions and economic activities both within and
across borders, disrupted global supply chains, and resulted in economic
slowdowns in countries around the world. Cambodia is no exception in this
pandemic era. Cambodia registered a negative economic growth rate of -3.1% in
2020 as its service and industry sectors experienced severe declines (-6.7% and
-1.2%, respectively). As a small, export-dependent economy, Cambodia is
susceptible to external environment conditions. Moreover, most businesses in
Cambodia are small and medium enterprises (SMEs), and they are also
encountering major challenges including a high proportion of informality,
limited access to finance, and inadequate human resources, technology and
innovation capabilities. In this respect, Cambodia needs to develop its
capacity to absorb such shock and boost the country’s economic development.
Building a solid economic foundation through promoting local businesses and
private sector development is a must to diversify the country’s economic
activities during these uncertain times.
In this regard, the study aimed to describe the internal and external factors affecting Cambodian firms’ recent growth and performance in a period of high instability, resulting from the Covid-19 pandemic and other risky global conditions. This study used original data from a firm-level survey with 361 business enterprises in two macro-sectors, namely industry and services, conducted between July and August 2022.