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Samuel C. Y. Ku

Bio: Samuel C. Y. Ku is an academic researcher from National Sun Yat-sen University. The author has contributed to research in topics: Government & Industrialisation. The author has an hindex of 1, co-authored 1 publications receiving 12 citations.

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TL;DR: In this article, the authors examined the differences between the neoclassical and national development schools of economics on how an economy should develop and found that although industries in developing countries need government assistance, the specific political and economic contexts of each country affect the policies adopted and their effectiveness.
Abstract: Numerous differences exist between the neoclassical and national development schools of economics on how an economy should develop. For example, should the state interfere in the market using state resources, and cultivate certain industries to achieve specific developmental goals? Although the automotive industries in both Thailand and Malaysia developed in the 1970s with considerable government involvement, they have evolved along very different lines. Can these differences be traced to different interactions between the state and industry in these two countries? This paper examines this issue and finds that although industries in developing countries need government assistance, the specific political and economic contexts of each country affect the policies adopted and their effectiveness. The choice between “autonomous development” (Malaysia) and “dependent development” (Thailand) is the first issue. The second issue is that politics in Malaysia has deterred the automotive industry from adopting a “market following” position. This paper finds that the choice of strategy and political interference are the two main reasons the automotive industry in Malaysia is less competitive than that in Thailand.

13 citations


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TL;DR: In this paper, the authors compared the evolution of automotive sectors in Malaysia, Thailand, and China with that of Korea by focusing on industrial policy, particularly local content requirements (LCRs) and global value chains (GVCs).
Abstract: This study compares the evolution of automotive sectors in Malaysia, Thailand, and China with that of Korea by focusing on industrial policy, particularly local content requirements (LCRs) and global value chains (GVCs). Although LCRs show common effects of increasing the localization ratio to a certain degree, the eventual development paths of automotive sectors diverge in the three countries. In terms of three measures of upgrading in GVC, namely, the share of domestic (or foreign) value-added in their exports, export orientation (re-exported intermediate imports), and international competitiveness of their intermediate parts (domestic value-added embodied in foreign exports), China is the most successful (highest in two measures), followed by Thailand with strong export orientation, and with Malaysia being the least successful. Such divergent outcomes in three countries are explained in terms of three key factors, namely, local ownership, disciplines from market competition, and firm-level effort and strategies. Given the monopoly by national brand makers, Malaysia lacks discipline from market competition, whereas Thailand lacks local ownership and consistency in promoting domestic value-added. China is neither a national monopoly nor dominated by foreign joint ventures, but a strong entry by locally owned firms result in fierce market competition. In addition, Chinese firms attempt to build their technological capabilities and localize the production of key parts and components.

16 citations

Journal ArticleDOI
TL;DR: In this article, the authors show that the leading export sectors are not manufacturing (such as electronics) in Malaysia or mining alone in Chile, but instead resource-based sectors (petroleum, rubber, palm oil, and wood-based), and that the sustained growth of these sectors is not the result of free-markets, as frequently argued, but also of specific industrial policy measures that have enabled the accumulation of productive and innovation capabilities through R&D support, fiscal incentives, export assistance, and quality control.
Abstract: This paper starts by showing that Chile and Malaysia are on the path of escaping the middle-income trap in terms of their income level relative to that of the USA In contrast to the conventional view, we find that the leading export sectors are not manufacturing (such as electronics) in Malaysia or mining alone in Chile Instead, the engines of growth have been (1) resource-based sectors (petroleum, rubber and palm oil) in Malaysia; and (2) non-mining resource-based sectors (salmon, fruits, wine and wood-based) in Chile Furthermore, the sustained growth of these sectors is not the result of free-markets, as frequently argued, but also of specific industrial policy measures, that have enabled the accumulation of productive and innovation capabilities through R&D support, fiscal incentives, export assistance, and quality control We also find that the emergence of locally-controlled firms has been an important aspect of this long-term success, although the sources of the initial learning included foreign actors and FDI The cases of Chile and Malaysia consequently show the possibility of escaping the middle-income trap not through manufacturing but instead through resource-based development Such strategy differs from the so-called short cycle technology-based catch-up by the East Asian tigers and from the unsustainable commodity rent-extraction in resource-rich countries, but is consistent with the view that emphasizes the need to specialize in sectors with low entry barriers, and to promote investments in innovation and technological capabilities

16 citations