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Explaining Thailand’s Automotive Manufacturing Success

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  • Peter Warr
  • Archanun Kohpaiboon

Abstract

We argue that the success of Thailand’s export-oriented automotive industry was based on three factors. First was the substantial public investment in productivity-raising port facilities and related infrastructure, beginning in the 1990s, that constituted the Eastern Seaboard economic corridor. The second was the exchange rate depreciation that accompanied the 1997-99 Asian Financial Crisis. Jointly, these two factors made manufacturing production for export more profitable. The third was two key policy changes adopted by the Thai government shortly after the crisis, and partly in response to it: (a) abolition of restrictions on foreign ownership, and (b) abolition of local content requirements.

Suggested Citation

  • Peter Warr & Archanun Kohpaiboon, 2018. "Explaining Thailand’s Automotive Manufacturing Success," Departmental Working Papers 2018-02, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2018-02
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/crawford01_cap_anu_edu_au/2018-04/acde_2018_-_02_final.pdf
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    References listed on IDEAS

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    1. Athukorala, Prema-chandra & Narayanan, Suresh, 2018. "Economic corridors and regional development: The Malaysian experience," World Development, Elsevier, vol. 106(C), pages 1-14.
    2. Yveline Lecler & Patarapong Intarakumnerd, 2010. "Sustainability of Thailand's Competitiveness: the Policy Challenges," Post-Print halshs-00563666, HAL.
    3. Doner, Richard F. & Noble, Gregory W. & Ravenhill, John, 2006. "Industrial competitiveness of the auto parts industries in four large Asian countries : the role of government policy in a challenging international environment," Policy Research Working Paper Series 4106, The World Bank.
    4. Warr, Peter & Kohpaiboon, Archanun, 2017. "Thailand’s Automotive Manufacturing Corridor," ADB Economics Working Paper Series 519, Asian Development Bank.
    5. Doner,Richard F., 2009. "The Politics of Uneven Development," Cambridge Books, Cambridge University Press, number 9780521516129.
    6. Kaoru Natsuda & John Thoburn, 2013. "Industrial policy and the development of the automotive industry in Thailand," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(3), pages 413-437.
    7. Brunner, Hans-Peter, 2013. "What is Economic Corridor Development and What Can It Achieve in Asia’s Subregions?," Working Papers on Regional Economic Integration 117, Asian Development Bank.
    8. Doner,Richard F., 2009. "The Politics of Uneven Development," Cambridge Books, Cambridge University Press, number 9780521736114.
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    Cited by:

    1. Wannaphong Durongkaveroj, 2023. "Emphasis on domestic value added in export in the era of global value chain: evidence from Thailand," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 703-729, September.

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    More about this item

    Keywords

    Automotive exports; final assembly; parts and components; Eastern Seaboard scheme; Thailand.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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