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Understanding Innovation in Production Networks in East Asia

  • Ganeshan Wignaraja

    (Asian Development Bank Institute (ADBI))

This paper explores the “black box†of innovation in the electronics production network in East Asia through a mapping exercise of technological capabilities and an econometric analysis of exporting in the People’s Republic of China (PRC), Thailand, and the Philippines. Technology-based approaches to trade offer a plausible explanation for firm-level exporting behavior and complement the literature on production networks. The econometric results confirm the importance of foreign ownership and innovation in increasing the probability of exporting in electronics. Higher levels of skills, managers’ education, and capital also matter in the PRC as well as accumulated experience in Thailand. Furthermore, a technology index composed of technical functions performed by firms (to represent technological capabilities) emerges as a more robust indicator of innovation than the research and development (R&D) to sales ratio. Accordingly, technological effort in electronics in these countries mostly focuses on assimilating and using imported technologies rather than formal R&D by specialized engineers.

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File URL: http://www.eaber.org/node/23395
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Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 23395.

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Date of creation: Mar 2013
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Handle: RePEc:eab:microe:23395
Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org

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  15. repec:dgr:tuecis:0201 is not listed on IDEAS
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  17. Bleaney, Michael & Wakelin, Katherine, 2002. " Efficiency, Innovation and Exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(1), pages 3-15, February.
  18. Wignaraja, Ganeshan, 2012. "Innovation, learning, and exporting in China: Does R&D or a technology index matter?," Journal of Asian Economics, Elsevier, vol. 23(3), pages 224-233.
  19. Iammarino, Simona & Padilla-Pérez, Ramon & von Tunzelmann, Nick, 2008. "Technological Capabilities and Global-Local Interactions: The Electronics Industry in Two Mexican Regions," World Development, Elsevier, vol. 36(10), pages 1980-2003, October.
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  21. Correa, Paulo & Dayoub, Mariam & Francisco, Manuela, 2007. "Identifying supply-side constraints to export performance in Ecuador : an exercise with Investment Climate Survey data," Policy Research Working Paper Series 4179, The World Bank.
  22. Yingqi Wei & Xiaming Liu & Chengang Wang, 2008. "Mutual productivity spillovers between foreign and local firms in China," Cambridge Journal of Economics, Oxford University Press, vol. 32(4), pages 609-631, July.
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