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Global productions sharing and local entrepreneurship in developing countries: Evidence from Penang export hub, Malaysia

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  • Prema-chandra Athukorala

Abstract

This papers examines opportunities and policy options for developing countries to promote engagement of local firms in global production networks. The paper begins with a stage-setting overview of the ongoing process of global production sharing and the emerging opportunities local firm's engagement. It then undertakes an illustrative case study of the export hub in the state of Penang in Malaysia. Forging operational links between multinational enterprises (MNEs), which set up assembly plants in Penang, and local firms was an integral part of the export-led development strategy of the state. This policy emphasis was instrumental in fostering a domestic supplier network around the operations of the MNE subsidiaries. A number of local firms, which emerged de novo through production sharing have become global players in their own right, with production bases in a number of other countries.

Suggested Citation

  • Prema-chandra Athukorala, 2017. "Global productions sharing and local entrepreneurship in developing countries: Evidence from Penang export hub, Malaysia," Departmental Working Papers 2017-01, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2017-01
    DOI: 10.1002/app5.171
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    Cited by:

    1. Pankhuri Sein & Ash Narayan Sah, 2025. "Export dynamics, exchange rate volatility, and economic stability: evidence from Asia-Pacific economies," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    2. Valentina De Marchi & Matthew Alford, 2022. "State policies and upgrading in global value chains: A systematic literature review," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 88-111, March.
    3. Prema-chandra Athukorala & Raveen Ekanayake, 2024. "International Production and Industrial Transformation: The Singapore Story," Departmental Working Papers 2024-4, The Australian National University, Arndt-Corden Department of Economics.
    4. Shan Jayasinghe & Lester W. Johnson & Nilan Udayanga & Lakshitha Kumarapperuma & Sanath Ranjitha, 2023. "Drivers Enabling Developing Countries to Enter High-Tech Production Networks through Global Production Sharing: Evidence from Malaysia, Taiwan, and Vietnam," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    5. Kris Hartley & Jun Jie Woo & Sun Kyo Chung, 2018. "Urban innovation policy in the postdevelopmental era: Lessons from Singapore and Seoul," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 599-614, September.
    6. Richard Kozul-Wright & Daniel Poon, 2018. "Asian development after the Asian Drama," WIDER Working Paper Series wp-2018-135, World Institute for Development Economic Research (UNU-WIDER).
    7. Athukorala, Prema-chandra & Narayanan, Suresh, 2018. "Economic corridors and regional development: The Malaysian experience," World Development, Elsevier, vol. 106(C), pages 1-14.
    8. Richard Kozul-Wright & Daniel Poon, 2018. "Asian development after the Asian Drama," WIDER Working Paper Series 135, World Institute for Development Economic Research (UNU-WIDER).
    9. Juthathip Jongwanich, 2020. "Export diversification, margins and economic growth at industrial level: Evidence from Thailand," The World Economy, Wiley Blackwell, vol. 43(10), pages 2674-2722, October.
    10. Nobuaki Yamashita & Kiichiro Fukasaku, 2021. "Is the COVID-19 Pandemic Recasting Global Value Chains in East Asia?," Working Papers DP-2021-19, Economic Research Institute for ASEAN and East Asia (ERIA).

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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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