Foreign Firms, Exports and Technological Capabilities: A Study of Electronics Firms in Indonesia, Malaysia, Philippines and Thailand
European Journal of Development Research, 16(3): 587-623, 2004
Posted: 28 Jun 2013
Date Written: 2004
This article seeks to compare the export incidence and technological capabilities of foreign and local electronics firms in Malaysia, the Philippines and Thailand, and to explain their determinants. Foreign firms generally produced higher human resource and process technology capabilities than local firms in Malaysia and Thailand. Although foreign firms were generally endowed with higher research and development (R and D) capabilities in Malaysia and Thailand, local firms enjoyed higher technological capabilities than foreign firms in the Philippines. Statistically, only process technology, human resources, and R and D (indirectly through links with process technology) were linked with exports. Owing to low intensity levels, R and D enjoyed little relationship with the other explanatory variables. Foreign ownership was strongly correlated with exports, but its statistical link with process technology, human resources and R and D capabilities was not significant, which is likely to be a cause of the need to use cutting edge human resource and process technologies in order to export. Weak high-tech infrastructure seems to have restricted firms' participation in high value added activities such as R and D, but sufficient network cohesion in export processing zones has facilitated expansion in low value added exports.
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