Structural Equation Model of the Variables that Influence Thai Automotive Parts Industry Efficiency
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Abstract
With shipments headed for more than 100 countries, Thailand is the 13th largest automotive parts exporter and the sixth-largest commercial vehicle manufacturer globally, with over 60% of its 100 largest auto part suppliers having its production hub in Thailand.Thus, researchers set out to investigatehow strategic planning (STY), technology and innovation (TIN), product quality (QLY), total quality management (TQM), and knowledge management (KNG) affected a firm’s efficiency (EFF). From the approximate 2,500 automotive-related firms based in Thailand, the authors using lists from multiple private and governmental agencies, eventually obtained 455 questionnaires from firm owners, executives, and managers from May 2017 to October 2017.The structural equation model (SEM) analysis between variables influencing EFF was conducted utilizing a latent variable LISREL 9.10path analysis and a goodness-of-fit (GOF) assessment. Results from the nine hypotheses SEM revealed support for seven of the study's conceptualized relationships. Also, all the causal variables in the SEM were determined to positively affect EFF, which was concluded due to the combined variance of the factors affecting EFF (R 2 ) by 71%.Finally, EFF was shown to be influenced by five variables, and when ranked in importance were STY, TQM, QLY, TIN, and KNG with total effect (TE) values of 0.79, 0.75, 0.39, 0.12, and 0.08, respectively.
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