Can Malaysia escape the middle-income Trap ? a strategy for Penang
AbstractHow can Penang upgrade and diversify its economy? This paper addresses this question using a number of methodologies that have been developed for assessing competitiveness and identifying the direction of future industrial evolution. The results show that although Penang was successful in attracting foreign direct investment to the electronics industry, this has not translated into a deepening of industrial capabilities or the nurturing of innovation capacity in Penang. No large Malaysian firms in Penang have taken the lead in innovation and there is little new entry by local firms, despite incentives provided by local and national governments are generous. Universiti Sains Malaysia, the principal university in Penang, is contributing through provision of skills, and it is beginning to multiply university industry linkages. However, the university’s research activities are too limited and too diffuse to significantly initiate innovation by local industry. Under the current circumstances, and given its relatively small size, Penang will have to try much harder to strengthen its competitive advantage in its most important industry -electronics- through actions that build research capital. It will also have to increase its efforts to develop the potential of other value-adding activities, such as medical services and tourism. A strategy focused on localization economies is likely to be the most feasible option.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4971.
Date of creation: 01 Jun 2009
Date of revision:
Technology Industry; Tertiary Education; E-Business; ICT Policy and Strategies; Agricultural Knowledge&Information Systems;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-CSE-2009-07-11 (Economics of Strategic Management)
- NEP-DEV-2009-07-11 (Development)
- NEP-TUR-2009-07-11 (Tourism Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007.
"What you export matters,"
Journal of Economic Growth,
Springer, vol. 12(1), pages 1-25, March.
- Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2005. "What You Export Matters," NBER Working Papers 11905, National Bureau of Economic Research, Inc.
- Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2005. "What You Export Matters," Working Paper Series rwp05-063, Harvard University, John F. Kennedy School of Government.
- Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2006. "What You Export Matters," CEPR Discussion Papers 5444, C.E.P.R. Discussion Papers.
- Lall, Somik & Shalizi, Zmarak & Deichmann, Uwe, 2001.
"Agglomeration economies and productivity in Indian industry,"
Policy Research Working Paper Series
2663, The World Bank.
- Lall, Somik V. & Shalizi, Zmarak & Deichmann, Uwe, 2004. "Agglomeration economies and productivity in Indian industry," Journal of Development Economics, Elsevier, vol. 73(2), pages 643-673, April.
- Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
- Kodama, Fumio & Suzuki, Jun, 2007. "How Japanese Companies have used Scientific Advances to Restructure their Businesses: The Receiver-Active National System of Innovation," World Development, Elsevier, vol. 35(6), pages 976-990, June.
- Rice, Patricia & Venables, Anthony J., 2004.
"Spatial Determinants of Productivity: Analysis for the Regions of Great Britain,"
CEPR Discussion Papers
4527, C.E.P.R. Discussion Papers.
- Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006. "Spatial determinants of productivity: Analysis for the regions of Great Britain," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 727-752, November.
- Patricia Rice & Tony Venables, 2004. "Spatial determinants of productivity: analysis for the regions of Great Britain," LSE Research Online Documents on Economics 2040, London School of Economics and Political Science, LSE Library.
- Patricia Rice & Anthony J. Venables, 2004. "Spatial Determinants of Productivity: Analysis for the Regions of Great Britain," CEP Discussion Papers dp0642, Centre for Economic Performance, LSE.
- Shahid Yusuf & Kaoru Nabeshima & Shoichi Yamashita, 2008. "Growing Industrial Clusters in Asia : Serendipity and Science," World Bank Publications, The World Bank, number 6429, October.
- Lall, Sanjaya & Weiss, John & Zhang, Jinkang, 2006. "The "sophistication" of exports: A new trade measure," World Development, Elsevier, vol. 34(2), pages 222-237, February.
- Au, Chun-Chung & Henderson, J. Vernon, 2006.
"How migration restrictions limit agglomeration and productivity in China,"
Journal of Development Economics,
Elsevier, vol. 80(2), pages 350-388, August.
- Chun-Chung Au & Vernon Henderson, 2002. "How Migration Restrictions Limit Agglomeration and Productivity in China," NBER Working Papers 8707, National Bureau of Economic Research, Inc.
- Wright, Mike & Clarysse, Bart & Lockett, Andy & Knockaert, Mirjam, 2008. "Mid-range universities' linkages with industry: Knowledge types and the role of intermediaries," Research Policy, Elsevier, vol. 37(8), pages 1205-1223, September.
- Kodama, Toshihiro, 2008. "The role of intermediation and absorptive capacity in facilitating university-industry linkages--An empirical study of TAMA in Japan," Research Policy, Elsevier, vol. 37(8), pages 1224-1240, September.
- Quigley, John M., 2008. "Urbanization, Agglomeration, and Economic Development," Berkeley Program on Housing and Urban Policy, Working Paper Series qt6tf2s100, Berkeley Program on Housing and Urban Policy.
- Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
- Henry Overman & Anthony J. Venables, 2005.
"Cities in the Developing World,"
CEP Discussion Papers
dp0695, Centre for Economic Performance, LSE.
- Bruno Van Pottelsberghe, 2008.
"Europe's R&D: Missing the wrong targets?,"
ULB Institutional Repository
2013/167075, ULB -- Universite Libre de Bruxelles.
- Bruno Pottelsberghe de la Potterie, 2008. "Europe's R&D: Missing the Wrong Targets?," Intereconomics: Review of European Economic Policy, Springer, vol. 43(4), pages 220-225, July.
- Deichmann, Uwe & Kaiser, Kai & Lall, Somik V & Shalizi, Zmarak, 2005. "Agglomeration, transport, and regional development in Indonesia," Policy Research Working Paper Series 3477, The World Bank.
- Hiratsuka, Daisuke, 2006. "Outward FDI from and intraregional FDI in ASEAN : trends and drivers," IDE Discussion Papers 77, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- Florida, Richard & Mellander, Charlotta & Stolarick, Kevin, 2007.
"Inside the Black Box of Regional Development - human capital, the creative class and tolerance,"
Working Paper Series in Economics and Institutions of Innovation
88, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Richard Florida & Charlotta Mellander & Kevin Stolarick, 2008. "Inside the black box of regional development: human capital, the creative class and tolerance," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 615-649, September.
- William J. Baumol, 2004. "Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements," NBER Working Papers 10578, National Bureau of Economic Research, Inc.
- Shahid Yusuf & Kaoru Nabeshima, 2007. "How Universities Promote Economic Growth," World Bank Publications, The World Bank, number 6631.
- World Bank, 2005. "Malaysia : Firm Competitiveness, Investment Climate and Growth," World Bank Other Operational Studies 8310, The World Bank.
- Prema-chandra Athukorala, 2011. "Growing with Global Production Sharing: The Tale of Penang Export Hub," Departmental Working Papers 2011-13, The Australian National University, Arndt-Corden Department of Economics.
- Lee, Keun & Kim, Byung-Yeon & Park, Young-Yoon & Sanidas, Elias, 2013. "Big businesses and economic growth: Identifying a binding constraint for growth with country panel analysis," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 561-582.
- Zhang, Linxiu & Yi, Hongmei & Luo, Renfu & Liu, Changfang & Rozelle, Scott, 2012. "The Human Capital Roots of the Middle Income Trap: The Case of China," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 131119, International Association of Agricultural Economists.
- Im, Fernando Gabriel & Rosenblatt, David, 2013. "Middle-income traps : a conceptual and empirical survey," Policy Research Working Paper Series 6594, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.