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Industrial Policy, Multinational Strategy and Domestic Capability: A Comparative Analysis of the Development of South Africa’s and Thailand’s Automotive Industries


  • Justin Barnes

    () (University of KwaZulu-Natal
    B&M Analysts)

  • Anthony Black

    (School of Economics, University of Cape Town)

  • Kriengkrai Techakanont

    (School of Economics, Thammasat University)


Abstract For developing countries seeking to promote the automotive industry, it has been essential to attract foreign investment, and the terms under which this takes place are key determinants of the resulting development impact. This article examines the development of the sector in South Africa (SA) and Thailand. Both industries have been driven by growing domestic demand, government support and rapid international integration, but the Thai industry has grown at a significantly faster pace. The article demonstrates that the Thai automotive industry has major firm-level cost and market advantages. The combination of a favourable location, supportive trade and industrial policy and supply-side strengths has led to large-scale investment and Thailand’s development as a major regional hub. Foreign investment in SA on the other hand has been at a lower level, aimed primarily at accessing the domestic market. The consequence has been more limited development of the automotive cluster.

Suggested Citation

  • Justin Barnes & Anthony Black & Kriengkrai Techakanont, 2017. "Industrial Policy, Multinational Strategy and Domestic Capability: A Comparative Analysis of the Development of South Africa’s and Thailand’s Automotive Industries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 37-53, January.
  • Handle: RePEc:pal:eurjdr:v:29:y:2017:i:1:d:10.1057_ejdr.2015.63
    DOI: 10.1057/ejdr.2015.63

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    References listed on IDEAS

    1. Anthony Black, 2009. "Location, Automotive Policy, and Multinational Strategy: The Position of South Africa in the Global Industry since 1995," Growth and Change, Wiley Blackwell, vol. 40(3), pages 483-512.
    2. Yannick Lung & Jorge Carrillo & Rob Van Tulder, 2004. "Cars, Carriers of regionalism?," Post-Print hal-00248180, HAL.
    3. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    4. Archanun Kohpaiboon & Juthathip Jongwanich, 2013. "International Production Networks, Clusters, and Industrial Upgrading: Evidence from Automotive and Hard Disk Drive Industries in Thailand," Review of Policy Research, Policy Studies Organization, vol. 30(2), pages 211-239, March.
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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:9:p:3275-:d:169638 is not listed on IDEAS
    2. Black Anthony & McLennan Thomas & Makundi Brian, 2017. "Working Paper 282 - Africa’s Automotive Industry Potential and Challenges," Working Paper Series 2412, African Development Bank.


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