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Industrial Upgrading and Global Recession: Evidence of Hard Disk Drive and Automotive Industries in Thailand

  • Kohpaiboon, Archanun

    (Asian Development Bank Institute)

  • Poapongsakorn, Nipon

    (Asian Development Bank Institute)

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    This paper illustrates the upgrading experiences of the automotive and hard disk drive (HDD) industries in Thailand, chosen because of their outstanding export performance in the developing world. An understanding of their upgrading experiences can shed some light on the ongoing debate regarding the relative importance of international production networks (IPNs) and industrial clusters (ICs) and their implications for prudential industrial policy. The impact of the recent global recession is also discussed in this paper. There is evidence of industrial upgrading in both the automotive and HDD industries. Yet one primary policy challenge still remains, that is, the limited role of indigenous suppliers in the multinational enterprise (MNE) production networks. This limited role is, to a certain extent, related to the overall incentive structure. Where these two industries differ is in their mode of networking, that is, whether they are part of an IPN or an IC. In the case of the automotive industry, industrial clustering has been observed and has reached a level where the local content of a locally manufactured vehicle is approaching 100%. In the case of the HDD industry, industrial clustering has naturally occurred and reached a certain level.

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    File URL: http://www.adbi.org/files/2011.05.24.wp283.industrial.upgrading.global.recession.thailand.pdf
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    Paper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 283.

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    Length: 34 pages
    Date of creation: 25 May 2011
    Date of revision:
    Handle: RePEc:ris:adbiwp:0283
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    1. Shahid Yusuf & M. Anjum Altaf & Kaoru Nabeshima, 2004. "Global Production Networking and Technological Change in East Asia," World Bank Publications, The World Bank, number 14918, August.
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