Thailand’s Automotive Manufacturing Corridor

Peter Warr and Archanun Kohpaiboon

No 519, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Thailand’s export-oriented automotive industry is a recognized economic success story. How did it happen and what lessons might other countries draw? This paper argues that the success of the industry was based on three factors. First was the substantial public investment in port facilities and related infrastructure, beginning in the 1990s, that constituted the Eastern Seaboard economic corridor. Second was the exchange rate depreciation that followed the 1997–1999 Asian Financial Crisis, making manufacturing production for export more profitable. The third factor was two key policy changes adopted by the Thai government shortly after the crisis, and partly in response to it: (a) abolition of restrictions on foreign ownership and (b) abolition of local content requirements. Neighboring countries, including Malaysia, Indonesia, and the Philippines, also experienced the crisis and were potential competitors in attracting foreign investment in automotive production for export. But they did not adopt these two key reforms.

Keywords: automotive exports; Eastern Seaboard scheme; final assembly; parts and components; Thailand (search for similar items in EconPapers)
JEL-codes: F14 L62 O18 O24 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2017-12-01
New Economics Papers: this item is included in nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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