The Political Economy of Automotive Industrialization in East Asia

Abstract

This book offers a political economy explanation for the striking cross-national differences in strategies and performance among East Asia’s automotive industries. Some countries—China, South Korea, and Taiwan—have successfully pursued “intensive” growth strategies by increasing local value added based on domestic inputs and technological competencies. Malaysia has attempted but failed to pursue this path. In contrast, Thailand has become a champion of “extensive” growth, relying on foreign assemblers and their suppliers to achieve an impressive expansion of production, assembly, and exports. Latecomer Indonesia has followed Thailand with some success, whereas the Philippines has remained an automotive backwater. Through cross-case and within-case analyses of the seven countries, the book argues that variation is a function of the institutional and political contexts in which firms operate. Different strategies require different institutions and institutional capacities. Intensive development is especially institutionally demanding. Effective institutions emerge when political leaders face severe claims on resources (security threats and domestic pressures for welfare improvement) in the absence of easily accessible revenues to satisfy such needs. Brief comparisons with Brazil, Mexico, and other developing countries confirm the utility of the analytic framework. This explanation is superior to neoclassical accounts. It is consistent with but provides more insight than other prominent approaches to development: national innovation systems, global value chains, and developmental states. New challenges facing auto assemblers and suppliers, such as the transition to electric and autonomous vehicles, will call heavily upon the institutional capacities highlighted in this book.

The Present and Future of Malaysian Technical and Vocational Education and Training (TVET)

“…The government acknowledged the importance of providing technical and vocational education to satisfy the needs of the expanding industrial sector. The first technical school was founded in 1955, while the first vocational school was formed in 1964 (Doner et al, 2021;Tilak, 2003). These schools offered instruction in disciplines like engineering, mechanics, electronics, and agriculture.…”

Supplier Networks at the Integrated Peripheries of the Automobile Industry: The Case of Keiretsu Suppliers in Thailand

“…Subsequent GVC/GPN research has delineated a more nuanced approach for unpacking upgrading opportunities. In their study on the impacts of the German firm BMW in Thailand, Coe et al (2004) argued that Thailand's upgrading trajectory depends just as much on interfirm exchanges as regional and local institutions and their policies (see also Yeung 2009;Doner et al 2021). To this end, Yeung (2016) argued that (developing) states can form strategic couplings with lead firms (usually from the advanced economies) to pursue industrial expansion and technological upgrading within their respective territories.…”

Mapping the Accidents and Unsafe Conditions of Workers in the Automotive Sector

“…The automotive sector can be divided into two main sets, automakers, and auto part suppliers. Its companies are recognized for their importance as transformation industries for carrying projects through from the planning to the sales of their products, besides their contributions to technological innovations, linkages with the segment of inputs, components, parts, and services (Wolniak, 2019;Barbosa et al, 2020;Doner, Noble and Ravenhill, 2021). Furthermore, the sector has economic relevance, with the generation of income, taxes, exports, and skilled jobs, and each of these elements are fundamental to the sustainable development plans of organizations in the sector (Araujo et al, 2021;Silva et al, 2021;Beier et al, 2022).…”