Industrial Upgrading and Global Recession: Evidence of Hard Disk Drive and Automotive Industries in Thailand

Archanun Kohpaiboon and Nipon Poapongsakorn
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Nipon Poapongsakorn: Asian Development Bank Institute

No 283, ADBI Working Papers from Asian Development Bank Institute

Abstract: This paper illustrates the upgrading experiences of the automotive and hard disk drive (HDD) industries in Thailand, chosen because of their outstanding export performance in the developing world. An understanding of their upgrading experiences can shed some light on the ongoing debate regarding the relative importance of international production networks (IPNs) and industrial clusters (ICs) and their implications for prudential industrial policy. The impact of the recent global recession is also discussed in this paper. There is evidence of industrial upgrading in both the automotive and HDD industries. Yet one primary policy challenge still remains, that is, the limited role of indigenous suppliers in the multinational enterprise (MNE) production networks. This limited role is, to a certain extent, related to the overall incentive structure. Where these two industries differ is in their mode of networking, that is, whether they are part of an IPN or an IC. In the case of the automotive industry, industrial clustering has been observed and has reached a level where the local content of a locally manufactured vehicle is approaching 100%. In the case of the HDD industry, industrial clustering has naturally occurred and reached a certain level.

Keywords: industrial upgrading; international production networks; industrial clusters; automotive industry; hard disk drive industry; thai manufacturing (search for similar items in EconPapers)
JEL-codes: F23 L62 L63 O33 O53 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-05-25
New Economics Papers: this item is included in nep-sea
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Related works:
Working Paper: Industrial Upgrading and Global Recession: Evidence of Hard Disk Drive and Automotive Industries in Thailand (2011)
Working Paper: Industrial Upgrading and Global Recession: Evidence of Hard Disk Drive and Automotive Industries in Thailand (2011)
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