The Political Economy of Automotive Industrialization in East Asia

Publication Type:

Conference Paper

Source:

Gerpisa colloquium, Detroit (2022)

Abstract:

Through a study of the automotive industries in seven East Asian countries—China, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand—we address the question of what makes for successful industrial upgrading, the process through which domestic firms acquire the capabilities to move into higher value-added activities at global levels of efficiency. We distinguish between two stylized but analytically useful levels of growth: extensive and intensive. In some countries, automotive industrialization has involved extensive growth, consisting largely of vehicle and components assembly and, in some cases, exports, primarily under the aegis of foreign producers operating in global value chains. In contrast, intensive growth occurs when local value added increases as a consequence of inputs from national producers, in turn resting on improvements in national technical capabilities. Our seven cases provide us not just with a mix of strategies but also variance in success. We explore the reasons for success and failure, and why some countries chose to make the investments required to successfully pursue an intensive strategy. Our focus is on the role of institutions specific to the automotive development strategy, and the political origins of these institutions.

      

 

  
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