Industrial Policy, Multinational Strategy and Domestic Capability: A Comparative Analysis of the Development of South Africa’s and Thailand’s Automotive Industries

Justin Barnes (), Anthony Black and Kriengkrai Techakanont
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Justin Barnes: University of KwaZulu-Natal
Kriengkrai Techakanont: School of Economics, Thammasat University

The European Journal of Development Research, 2017, vol. 29, issue 1, No 3, 37-53

Abstract: Abstract For developing countries seeking to promote the automotive industry, it has been essential to attract foreign investment, and the terms under which this takes place are key determinants of the resulting development impact. This article examines the development of the sector in South Africa (SA) and Thailand. Both industries have been driven by growing domestic demand, government support and rapid international integration, but the Thai industry has grown at a significantly faster pace. The article demonstrates that the Thai automotive industry has major firm-level cost and market advantages. The combination of a favourable location, supportive trade and industrial policy and supply-side strengths has led to large-scale investment and Thailand’s development as a major regional hub. Foreign investment in SA on the other hand has been at a lower level, aimed primarily at accessing the domestic market. The consequence has been more limited development of the automotive cluster.

Keywords: industrial policy; multinational; automotive industry; competitiveness; South Africa; Thailand (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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DOI: 10.1057/ejdr.2015.63

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