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Beyond Late Development: Taiwan's Upgrading Policies

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Author Info

  • Alice H. Amsden

    ()
    (MIT)

  • Wan-wen Chu

    ()
    (Academia Sinica)

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    Abstract

    In this book Alice Amsden and Wan-wen Chu cover new ground by analyzing the phenomenon of high-end catch-up. They study how leading firms from the most advanced latecomer countries like Taiwan have increased their market share in mature high-tech industries and services. The profits that true innovators in these industries once enjoyed have already declined, but profit rates are still above average. The latecomer firm that succeeds in capturing these rents earns "second-mover" advantage. Amsden and Chu examine the successful second movers in electronics and modern services. The critical factors, they show, are the government policies and large-scale firms that drive skills, speed, and scale. R&D in Taiwan was usually undertaken in conjunction with government labs, which prepared the way for local production of the next hot, mature product. Speed in ramping up at the firm level depended on project execution capabilities and access to capital. Scale proved to be an absolute entry requirement in modern service sectors, and was crucial to win subcontracts from leading foreign firms and to secure key components from world-class suppliers in the electronics industry. The authors challenge current orthodoxy along two lines. First, they argue that government played an important role through interventions that went beyond the market model and overcame the limitations of networking. Interventions possibly promoted mature high-tech even more than mid-tech. Second, the entrepreneurs in Taiwan were nationally owned large-scale firms rather than multinational companies.

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    Bibliographic Info

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    This book is provided by The MIT Press in its series MIT Press Books with number 0262011980 and published in 2003.

    Volume: 1
    Edition: 1
    ISBN: 0-262-01198-0
    Handle: RePEc:mtp:titles:0262011980

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    Web page: http://mitpress.mit.edu

    Related research

    Keywords: industry; development; taiwan; policy;

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    Cited by:
    1. Mahmood, Ishtiaq P. & Zheng, Weiting, 2009. "Whether and how: Effects of international joint ventures on local innovation in an emerging economy," Research Policy, Elsevier, vol. 38(9), pages 1489-1503, November.
    2. Tan, Danchi & Meyer, Klaus E., 2010. "Business groups' outward FDI: A managerial resources perspective," Journal of International Management, Elsevier, vol. 16(2), pages 154-164, June.
    3. Hung, Shih-Chang & Whittington, Richard, 2011. "Agency in national innovation systems: Institutional entrepreneurship and the professionalization of Taiwanese IT," Research Policy, Elsevier, vol. 40(4), pages 526-538, May.
    4. Koh, Francis C. C. & Koh, Winston T. H. & Tschang, Feichin Ted, 2005. "An analytical framework for science parks and technology districts with an application to Singapore," Journal of Business Venturing, Elsevier, vol. 20(2), pages 217-239, March.
    5. Prema-chandra Athukorala & Archanun Kohpaiboon, 2013. "Global Production Sharing, Trade Patterns and Industrialization in Southeast Asia," Departmental Working Papers 2013-18, The Australian National University, Arndt-Corden Department of Economics.
    6. Fuchs, Erica R.H., 2010. "Rethinking the role of the state in technology development: DARPA and the case for embedded network governance," Research Policy, Elsevier, vol. 39(9), pages 1133-1147, November.
    7. Liu, John Jen-wei & Ray, Pradeep Kanta, 2012. "The ‘Triple-alliance’ perspective for new industry creation: Lessons from the flat panel industry in Taiwan," Journal of Asian Economics, Elsevier, vol. 23(5), pages 585-599.
    8. Hu, Mei-Chih & Mathews, John A., 2005. "National innovative capacity in East Asia," Research Policy, Elsevier, vol. 34(9), pages 1322-1349, November.
    9. Eva A. Paus & Kevin P. Gallagher, . "06-01 "The Missing Links between Foreign Investment and Development: Lessons from Costa Rica and Mexico"," GDAE Working Papers 06-01, GDAE, Tufts University.
    10. Dantas, Eva & Bell, Martin, 2009. "Latecomer firms and the emergence and development of knowledge networks: The case of Petrobras in Brazil," Research Policy, Elsevier, vol. 38(5), pages 829-844, June.
    11. Hu, Mei-Chih, 2012. "Technological innovation capabilities in the thin film transistor-liquid crystal display industries of Japan, Korea, and Taiwan," Research Policy, Elsevier, vol. 41(3), pages 541-555.
    12. Banji O. Oyeyinka, 2012. "Institutional capacity and policy for latecomer technology development," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 5(1/2), pages 83-110.
    13. Loren Brandt & Eric Thun, 2010. "The Fight for the Middle: Upgrading, Competition, and Industrial Development in China," Working Papers tecipa-395, University of Toronto, Department of Economics.
    14. Kenney, Martin & Breznitz, Dan & Murphree, Michael, 2013. "Coming back home after the sun rises: Returnee entrepreneurs and growth of high tech industries," Research Policy, Elsevier, vol. 42(2), pages 391-407.
    15. Buckley, Peter J. & Hashai, Niron, 2014. "The role of technological catch up and domestic market growth in the genesis of emerging country based multinationals," Research Policy, Elsevier, vol. 43(2), pages 423-437.
    16. Prema-chandra Athukorala & Archanun Kophaiboon, 2013. "Trade and Investment Patterns in Asia: Implications for Multilateralizing Regionalism," Departmental Working Papers 2013-16, The Australian National University, Arndt-Corden Department of Economics.
    17. Pichit Patrawimolpon & Runchana Pongsaparn, 2006. "Thailand in the New Asian Economy: The Current State and Way Forward," Working Papers 2006-02, Economic Research Department, Bank of Thailand.
    18. Doner, Richard F. & Noble, Gregory W. & Ravenhill, John, 2006. "Industrial competitiveness of the auto parts industries in four large Asian countries : the role of government policy in a challenging international environment," Policy Research Working Paper Series 4106, The World Bank.
    19. Amsden, Alice, 2009. "Firm Ownership, FOEs, and POEs," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    20. Leonhard Plank & Cornelia Staritz, 2013. "‘Precarious upgrading’ in electronics global production networks in Central and Eastern Europe: the cases of Hungary and Romania," Brooks World Poverty Institute Working Paper Series ctg-2013-31, BWPI, The University of Manchester.
    21. Yakub Halabi, 2013. "Perpetuating the global division of labour: defensive free trade and development in the third world," Asia Pacific Trade and Investment Review, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 20(1), pages 91-120, June.
    22. Thomas, Jayan Jose, 2005. "Kerala's industrial backwardness: a case of path dependence in industrialization?," World Development, Elsevier, vol. 33(5), pages 763-783, May.

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