Flexible production systems and local machine-tool subcontracting: electronics components transnationals in Malaysia

Rasiah, Rajah

doi:10.1093/oxfordjournals.cje.a035274

Cited by 105 publications

(69 citation statements)

References 6 publications

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“…Despite observed technological learning at the plant level and the use of successively higher levels of technology, Malaysia and the other South East Asian economies remained somewhat behind Singapore through the 1980s and 1990s, lacking in R&D and new product development capabilities (Ariffin and Bell, 1998;Bell et al, 1996;Rasiah, 1994). However, the TNC subsidiaries in Malaysia and Thailand acquired useful manufacturing process skills and some limited product design capabilities and in some cases, limited R&D activities.…”

Section: Part 1: Tncs and Technology Upgradingmentioning

confidence: 99%

Upgrading the technological capabilities of foreign transnational subsidiaries in developing countries: The case of electronics in Thailand

2007

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Although substantial research shows the importance of transnational corporations (TNCs) to export led growth in some developing countries, it cannot be assumed that TNC subsidiaries will automatically upgrade their capabilities through time or in a uniform fashion. This paper explores the pattern and pace of a sample of exporting TNC subsidiaries operating in the electronics industry in Thailand. The analysis reveals a wide variety in capability building approaches through time, with some subsidiaries failing to develop capabilities and remaining as 'assembly only' plants. Other more dynamic plants developed process engineering and product design skills, investing heavily in capability building. One common determinant in capability building appears to be the overall technology strategy of the parent plant. In those subsidiaries which did not upgrade beyond assembly, technology decisions and processes were tightly controlled within the parent headquarter (HQ) locations. By contrast, the more dynamic plants exercised more discretion over local capability building. The latter were relatively decentralised and more open to policies to encourage upgrading. The study suggests that governments should tailor upgrading policies not only according to the approximate level of capabilities attained by local subsidiaries, but also according to how receptive firms are to upgrading, arguing that capability building and policy receptiveness go hand-in-hand. Other countries hoping to upgrade the quality of foreign direct investment might also wish to focus policies on the more technologically capable, ambitious and receptive categories of foreign subsidiary.3

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Section: Part 1: Tncs and Technology Upgradingmentioning

confidence: 99%

Upgrading the technological capabilities of foreign transnational subsidiaries in developing countries: The case of electronics in Thailand

2007

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“…They argue that there is a propensity for linkages to increase over time, as the skill level of local entrepreneurs grows, new suppliers emerge and local content increases. The time factor is highlighted also by Rasiah (1994) On average, this time line permits us to have a seven-year period over which to examine their operations after acquisition.…”

Section: Technology Diffusion Through Backward Linkagesmentioning

confidence: 99%

Foreign Direct Investment Through Acquisitions and Implications for Technological Upgrading: Case Evidence from Tanzania

Portelli

Narula

2006

Eur J Dev Res

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Using a case-study approach, this study examines the role of privatisation on the industrial landscape of Tanzania. We examine the impact of FDI through acquisitions on technology transfer within the acquired firm as well as the development of linkages to other firms based in the host country. Our results suggest that technological upgrading has occurred following FDI, the intensity of which reflects the type of firm-specific assets of parent MNE, as well as the pre-acquisition state of these industrial activities. Improved backward linkages are also evident with local economic agents, but their type and extent -reflecting Tanzania's comparative advantage in the primary sector -confirm that capabilities both within the acquired firms and also in the industrial base of the host country greatly influence the magnitude and intensity of technological upgrading. 'Narrower' technology gaps between the MNE affiliate and the domestic sector are more likely to result in backward linkages and determine the type of technological content of inputs sourced locally rather than within the MNE.

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“…In 1986, the incentive package offered to foreign firms, including licensed manufacturing warehouse status, was offered to local firms. In addition, at the request of the state government, the Malaysian Industrial Development Authority (the federal investment approval body) imposed a minimum capital requirement of RM2.5 million for foreign machine tool firms seeking approval to set up operations in Malaysia in order to support smaller local machine tool firms (Rasiah 1994).…”

Section: Fostering Multinational Enterpriselocal Firm Linksmentioning

confidence: 99%

“…Subsequently, local firms began to emerge (Rasiah 1994, Jacobson 2009). Some emerged out of existing small-scale operations, but most were newly created, mostly by former MNE employees.…”

Section: Emergence Of Ancillary Industries and Local Firmsmentioning

confidence: 99%

“…With a history of over four decade as a major hub in global production networks, Penang provides a valuable laboratory for a study of the interplay of government policies and global sourcing strategies of MNEs in determining developmental gains from global production sharing. There is a sizeable literate on policy reforms in Penang and its role as a main regional hub within global electronics and electrical goods production networks (for example Todd 1986, Narayanan 1999, Ernst 2004, UNIDO United Nation Industrial Development Organization 2009 and UNCTAD United Nation Conference on Trade and Development 2010, Rasiah 1994, 2002, Kharas et al 2010, Athukorala 2014b). The novelty of this article lies in its specific focus on the interplay of MNE's production-sharing strategies and government policy in facilitating the emergence of new local firms within production networks.…”

Section: Introductionmentioning

confidence: 99%

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Global Productions Sharing and Local Entrepreneurship in Developing Countries: Evidence from Penang Export Hub, Malaysia

Athukorala

2017

Asia & the Pacific Policy Studies

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This article examines opportunities and policy options for developing countries to promote engagement of local firms in global production networks. The article begins with a stagesetting overview of the ongoing process of global production sharing and the emerging opportunities local firm's engagement. It then undertakes an illustrative case study of the export hub in the state of Penang in Malaysia. Forging operational links between multinational enterprises, which set up assembly plants in Penang, and local firms was an integral part of the export-led development strategy of the state. This policy emphasis was instrumental in fostering a domestic supplier network around the operations of the multinational enterprise subsidiaries. A number of local firms, which emerged de novo through production sharing, have become global players in their own right, with production bases in a number of other countries.

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Flexible production systems and local machine-tool subcontracting: electronics components transnationals in Malaysia

Cited by 105 publications

References 6 publications

Upgrading the technological capabilities of foreign transnational subsidiaries in developing countries: The case of electronics in Thailand

Upgrading the technological capabilities of foreign transnational subsidiaries in developing countries: The case of electronics in Thailand

Foreign Direct Investment Through Acquisitions and Implications for Technological Upgrading: Case Evidence from Tanzania

Global Productions Sharing and Local Entrepreneurship in Developing Countries: Evidence from Penang Export Hub, Malaysia

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