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

Author

Listed:
  • Ganeshan Wignaraja

    (Asian Development Bank Institute (ADBI))

  • Jens Krüger
  • Anna Mae Tuazon

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.

Suggested Citation

  • Ganeshan Wignaraja & Jens Krüger & Anna Mae Tuazon, 2013. "Production Networks, Profits, and Innovative Activity : Evidence from Malaysia and Thailand," Microeconomics Working Papers 23391, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:microe:23391
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    References listed on IDEAS

    as
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    Cited by:

    1. Cassey Lee & Dionisius Narjoko, 2015. "Escaping the Middle-Income Trap in Southeast Asia: Micro Evidence on Innovation, Productivity, and Globalization," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 124-147, January.

    More about this item

    Keywords

    Production Networks; cross-border; ASEAN; Malaysia; Thailand; manufacturing firms; profit; Technological Capability;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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