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Production Networks, Profits, and Innovative Activity: Evidence from Malaysia and Thailand

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  • Wignaraja, Ganeshan

    (Asian Development Bank Institute)

  • Krüger, Jens

    (Asian Development Bank Institute)

  • Tuazon, Anna Mae

    (Asian Development Bank Institute)

Abstract

Cross-border production networks have been playing an increasingly important role in the Association of Southeast Asian Nations (ASEAN) countries’ trade in recent years, but micro-level studies are rare. This paper uses firm-level data from the two most active ASEAN countries in production networks (Thailand and Malaysia) and examines the effect of participating in production networks on profits and technological capabilities of firms. The empirical results show that participating in production networks raises profits. The evidence further suggests that participation in production networks is also positively correlated with technology upgrading, measured by a technological capabilities index.

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File URL: http://www.adbi.org/files/2013.02.01.wp406.prod.networks.profits.innovative.activity.pdf
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Bibliographic Info

Paper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 406.

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Length: 25 pages
Date of creation: 03 Feb 2013
Date of revision:
Handle: RePEc:ris:adbiwp:0406

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Keywords: production networks; regional integration; material outsourcing; technology upgrading; malaysia; thailand;

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