Industrial policy and the development of the automotive industry in Thailand

Natsuda, Kaoru; Thoburn, John

doi:10.1080/13547860.2012.742690

Cited by 42 publications

(28 citation statements)

References 25 publications

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“…The unit of analysis is the manufacturing firm in Thailand, an emerging economy where manufacturers are relatively resource constrained regarding their R&D efforts (Hoskisson et al., ). Several MNCs, such as Toyota and Honda, have continued to invest in Thailand since the early 2000s (Lecler, ; Natsuda & Thoburn, ). On the other hand, the Thai government also strongly encourages local corporations to conduct R&D work locally in Thailand by revamping its R&D tax incentive scheme in 2004 (UNCTAD, , p. 217).…”

Section: Methodsmentioning

confidence: 99%

The Role of Domestic and Foreign Knowledge Inflows on the Relationship between R&D Portfolio Mix and Innovation Outcomes: An Empirical Study of Manufacturing Firms in an Emerging Economy*

2019

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Manufacturing firms in emerging economies face research and development (R&D) challenges that are quite different from firms in developed economies. Firms in emerging economies complement their internal R&D capabilities by accessing two forms of external knowledge: domestic knowledge from local partners and foreign knowledge from multinationals. Accessing these knowledge sources requires distinct organizational capabilities, and they may differently moderate the relationship between internal R&D investments on exploration and exploitation and innovation outcomes. Exploitation R&D investments refer to investments made on refining products and processes, while exploration R&D investments refer to investments made on designing new products and processes. We examine this issue by combining two waves of surveys from 155 manufacturing firms in Thailand. Results show that relative exploration (i.e., the ratio of R&D investments made toward exploration over sum of exploration and exploitation) exhibits an inverted U-shaped relationship with the number of process and product innovations developed by the firm. This optimal mix, corresponding to the tipping point of an inverted U-shaped curve, shifts toward a higher level of relative 349 350 An Empirical Study of Manufacturing Firms in an Emerging Economy exploration (i.e., higher exploration and lower exploitation) when manufacturers have more access to domestic knowledge, and shifts toward a lower level of relative exploration (i.e., lower exploration and higher exploitation) when manufacturers have more access to foreign knowledge. Our findings are robust with similar effects on a firm's revenue generated from innovations. Taken together, these results demonstrate how external knowledge flows can moderate, in contrasting ways, the relationship between R&D portfolio mix and innovation outcomes. These findings also imply that inappropriately prioritizing R&D mix can lead to suboptimal innovation outcomes, offering further insights to both practicing managers and academics interested in emerging economy contexts.

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Section: Methodsmentioning

confidence: 99%

The Role of Domestic and Foreign Knowledge Inflows on the Relationship between R&D Portfolio Mix and Innovation Outcomes: An Empirical Study of Manufacturing Firms in an Emerging Economy*

2019

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“…The AFC was devastating for the Thai people, but it is ironic that without it these radical liberalisations may have been infeasible. 5 [ Table 3 about here] It has been claimed that the earlier local content requirement (LCR) scheme encouraged the development of Thai parts producers and that this paid off during the export phase (Doner 2009;Natsuda and Thoburn 2013). This argument is difficult to reconcile with the huge turnover in Thai parts and components manufacturing that occurred from 2000 onwards.…”

Section: Export Facilitation Phase 1997 To Presentmentioning

confidence: 99%

“…8 Pickups also represent a large share of automotive exports. To explain these observations, Natsuda and Thoburn (2013) postulate a form of industry policy they call "product champion (picking a winning type of vehicle)". 9 The authors contrast this with the Malaysian policy of creating a national champion firm.…”

Section: One-ton Pickups: a National Product Champion?mentioning

confidence: 99%

Explaining Thailand’s Automotive Manufacturing Success

Warr¹,

Kohpaiboon²

2018

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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.

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“…In other countries with high levels of motorbike ownership, such as Thailand, the dominance of motorbikes has declined over time and car ownership has increased significantly with rising incomes (Jakapong and Chumnong 2010). The MOIT (2013) makes it clear that this is the expectation also for Vietnam, with the government aims to meet rising demand with domestically manufactured cars, as indeed was accomplished in Thailand (see Natsuda and Thoburn 2013).…”

Section: Insert Table 2 About Here Driving Development: the Many Prommentioning

confidence: 99%

Driving Development? The Problems and Promises of the Car in Vietnam

Hansen

2016

Journal of Contemporary Asia

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The private car comes with promises of modernity and comfortable mobility for the growing middle class in Vietnam. Vietnam's government has also targeted the domestic automobile industry as a "spearhead industry" in an attempt to achieve industrial upgrading. Paradoxically, the government is simultaneously restraining the market for this industry through imposing high taxes and fees on cars, making them available only to a limited number of people. This article discusses the promises and problems of the automobile in Vietnam. It analyses policies related to the development of the automobile industry, and discusses the reasons for the relative failure of the project. The article argues that the failure is linked to weaknesses in Vietnamese development strategies, but also to the potential problems an expansion in car ownership in Vietnam would lead to. The paper contends that the car represents a development dilemma between industrialisation and urban mobility, and that environmental, energy and social concerns add to the rationale for limiting car ownership. Furthermore, while forces promoting car-driven industrialisation appear to be gaining ground, the requirements for regional economic integration may challenge the future of the infant automobile industry.

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Industrial policy and the development of the automotive industry in Thailand

Cited by 42 publications

References 25 publications

The Role of Domestic and Foreign Knowledge Inflows on the Relationship between R&D Portfolio Mix and Innovation Outcomes: An Empirical Study of Manufacturing Firms in an Emerging Economy*

The Role of Domestic and Foreign Knowledge Inflows on the Relationship between R&D Portfolio Mix and Innovation Outcomes: An Empirical Study of Manufacturing Firms in an Emerging Economy*

Explaining Thailand’s Automotive Manufacturing Success

Driving Development? The Problems and Promises of the Car in Vietnam

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