IDEAS home Printed from https://ideas.repec.org/p/eab/microe/23395.html
   My bibliography  Save this paper

Understanding Innovation in Production Networks in East Asia

Author

Listed:
  • Ganeshan Wignaraja

    (Asian Development Bank Institute (ADBI))

Abstract

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.

Suggested Citation

  • Ganeshan Wignaraja, 2013. "Understanding Innovation in Production Networks in East Asia," Microeconomics Working Papers 23395, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:23395
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/23395
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ganeshan Wignaraja, 2002. "Firm Size, Technological Capabilities and Market-oriented Policies in Mauritius," Oxford Development Studies, Taylor & Francis Journals, vol. 30(1), pages 87-104.
    2. Salvador Barrios & Holger Görg & Eric Strobl, 2003. "Explaining Firms’ Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, September.
    3. Dijk, van M., 2001. "The Determinants of Export Performance in Developing Countries: The Case of Indonesian Manufacturing," Working Papers 02.01, Eindhoven Center for Innovation Studies.
    4. Sanjaya Lall & Giorgio Barba Navaretti & Simón Teitel & Ganeshan Wignaraja, 1994. "Technology and Enterprise Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-13925-5, December.
    5. Ganeshan Wignaraja, 1998. "Trade Liberalization in Sri Lanka," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-26267-0, December.
    6. Sanjaya Lall, 1986. "Technological development and export performance in LDCs: Leading engineering and chemical firms in India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 122(1), pages 80-92, March.
    7. Grossman, Gene M. & Helpman, Elhanan, 1995. "Technology and trade," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 25, pages 1279-1337, Elsevier.
    8. Jun Du & Sourafel Girma, 2007. "Finance and Firm Export in China," Kyklos, Wiley Blackwell, vol. 60(1), pages 37-54, February.
    9. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    10. Richard E. Baldwin, 2008. "Managing The Noodle Bowl: The Fragility Of East Asian Regionalism," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(03), pages 449-478.
    11. Hirsch, Seev & Adar, Zvi, 1974. "Firm size and export performance," World Development, Elsevier, vol. 2(7), pages 41-46, July.
    12. Mitsuyo Ando & Fukunari Kimura, 2005. "The Formation of International Production and Distribution Networks in East Asia," NBER Chapters, in: International Trade in East Asia, pages 177-216, National Bureau of Economic Research, Inc.
    13. Rasiah, Rajah, 2003. "Foreign ownership, technology and electronics exports from Malaysia and Thailand," Journal of Asian Economics, Elsevier, vol. 14(5), pages 785-811, October.
    14. Alex Warren-Rodriguez, 2010. "Uncovering Trends in the Accumulation of Technological Capabilities and Skills in the Mozambican Manufacturing Sector," Oxford Development Studies, Taylor & Francis Journals, vol. 38(2), pages 171-198.
    15. 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.
    16. Yingqi Wei & Xiaming Liu & Chengang Wang, 2008. "Mutual productivity spillovers between foreign and local firms in China," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(4), pages 609-631, July.
    17. Jason Dedrick & Kenneth L. Kraemer & Greg Linden, 2010. "Who profits from innovation in global value chains? A study of the iPod and notebook PCs," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(1), pages 81-116, February.
    18. Richard Nelson, 2008. "Economic Development from the Perspective of Evolutionary Economic Theory," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 9-21.
    19. 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.
    20. Daisuke Hiratsuka & Yoko Uchida (ed.), 2010. "Input Trade and Production Networks in East Asia," Books, Edward Elgar Publishing, number 13909.
    21. Kiyohiko Ito & Vladimir Pucik, 1993. "Abstract," Strategic Management Journal, Wiley Blackwell, vol. 14(1), pages 61-75, January.
    22. Wignaraja, Ganeshan, 2008. "Foreign ownership, technological capabilities and clothing exports in Sri Lanka," Journal of Asian Economics, Elsevier, vol. 19(1), pages 29-39, February.
    23. Filippetti, Andrea & Peyrache, Antonio, 2011. "The Patterns of Technological Capabilities of Countries: A Dual Approach using Composite Indicators and Data Envelopment Analysis," World Development, Elsevier, vol. 39(7), pages 1108-1121, July.
    24. Saradindu Bhaduri & Amit Ray, 2004. "Exporting through technological capability: econometric evidence from India's pharmaceutical and electrical/electronics firms," Oxford Development Studies, Taylor & Francis Journals, vol. 32(1), pages 87-100.
    25. Xiaolan Fu, 2011. "Processing Trade, FDI and the Exports of Indigenous Firms: Firm‐Level Evidence from Technology‐Intensive Industries in China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73, pages 792-817, December.
    26. Herbert Glejser & Alexis Jacquemin & Jean Petit, 1980. "Exports in an Imperfect Competition Framework: An Analysis of 1,446 Exporters," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(3), pages 507-524.
    27. Sanjaya Lall, 1987. "Learning to Industrialize," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-18798-0, December.
    28. Prema-chandra Athukorala, 2011. "Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?," Asian Economic Papers, MIT Press, vol. 10(1), pages 65-95, Winter/Sp.
    29. Michael Bleaney & Katharine Wakelin, 2002. "Efficiency, innovation and exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(1), pages 3-15, February.
    30. 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.
    31. Sturgeon, Timothy J. & Kawakami, Momoko, 2010. "Global value chains in the electronics industry : was the crisis a window of opportunity for developing countries ?," Policy Research Working Paper Series 5417, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wignaraja, Ganeshan, 2012. "Do Exporting Firms in the People’s Republic of China Innovate?," ADBI Working Papers 365, Asian Development Bank Institute.
    2. Wignaraja, Ganeshan, 2008. "FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia," MERIT Working Papers 2008-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. 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.
    4. 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.
    5. Wignaraja, Ganeshan, 2008. "Foreign ownership, technological capabilities and clothing exports in Sri Lanka," Journal of Asian Economics, Elsevier, vol. 19(1), pages 29-39, February.
    6. Ganeshan Wignaraja, 2012. "Engaging Small and Medium Enterprises in Production Networks : Firm-level Analysis of Five ASEAN Economies," Trade Working Papers 23316, East Asian Bureau of Economic Research.
    7. Ganeshan Wignaraja, 2014. "Joining the supply chain: a firm-level perspective," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 4, pages 71-109, Edward Elgar Publishing.
    8. Molina-Domene, María A. & Pietrobelli, Carlo, 2012. "Drivers of technological capabilities in developing countries: An econometric analysis of Argentina, Brazil and Chile," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 504-515.
    9. Ganeshan Wignaraja, 2015. "Factors Affecting Entry into Supply Chain Trade: An Analysis of Firms in Southeast Asia," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(3), pages 623-642, September.
    10. Wignaraja, Ganeshan, 2006. "Foreign Ownership, Technological Capabilities and Exports: Evidence from 205 Clothing Firms in Sri Lanka," MERIT Working Papers 2006-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Keshari, Pradeep Kumar, 2012. "FDI and firm level export competitiveness in the Indian machinery industry," MPRA Paper 47069, University Library of Munich, Germany.
    12. Tarighi, Sina & Shavvalpour, Saeed, 2021. "Technological development of E&P companies in developing countries: An integrative approach to define and prioritize customized elements of technological capability in EOR," Resources Policy, Elsevier, vol. 72(C).
    13. Ozcelik, Emre & Taymaz, Erol, 2004. "Does innovativeness matter for international competitiveness in developing countries?: The case of Turkish manufacturing industries," Research Policy, Elsevier, vol. 33(3), pages 409-424, April.
    14. 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.
    15. Tomohiro Machikita & Yasushi Ueki, 2015. "Measuring and Explaining Innovative Capability: Evidence from Southeast Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 152-173, January.
    16. Ganeshan Wignaraja, 2015. "Comment on “Measuring and Explaining Innovative Capability: Evidence from Southeast Asia”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 10(1), pages 174-175, January.
    17. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    18. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    19. Andrea Morrison & Carlo Pietrobelli & Roberta Rabellotti, 2006. "Global Value Chains and Technological Capabilities: A Framework to Study Industrial Innovation in Developing Countries," KITeS Working Papers 192, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Dec 2006.
    20. 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.

    More about this item

    Keywords

    innovation; Production Networks; East Asia; technology index; Technological Capability; Foreign Ownership; Thailand; PRC; Philippines;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:microe:23395. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.