Changing Trade Structure and Industrial Deepening in the Thai Economy

Sompote Kunnoot

Abstract


Industrial development is increasing in complexity by economic inter-dependence within an economy. Between 1975 and 2010, Thailand’s industrial deepening was evidenced by an increase in average aggregate linkages. Backward linkages for manufacturing sectors is found to be above the agricultural and primary sectors as well as service sectors. Backward linkage improvement in the agricultural and primary sectors is matched by forward linkage improvement in the service sectors. Through the growth of intra-industry trade of the global supply chain, structural change is driven by the strong growth of manufacturing sectors, relative to the agricultural and primary sectors as well as the service sectors. Stationary backward and forward linkages in manufacturing sectors indicate constant reliance on imports and equally on the agricultural, primary and service sectors for input requirements and a strong reliance on export market for growth.


Full Text:

PDF

References


Amirahmadi, H., & Wu, W. (1995). Export processing zones in Asia. Asian Survey, 35(8), 828-44. https://doi.org/10.2307/2645785

Bhagwati, J., Krishna, P., & Panagariya, A. (2016). The world trade system today. In J. Bhagwati, et al. (Eds.). The World Trade System: Trends and Challenges. Cambridge: MIT Press.

Birdsall, N. M., Campos, J. E. L., Kim, C.-S., Corden, W. M., MacDonald, L. [editor]; Pack, H., Page, J., Sabor, R. & Stiglitz, J.E. (1993). The East Asian miracle: economic growth and public policy: Main report (English). A World Bank policy research report. New York, New York: Oxford University Press. Retrieved from http://documents.worldbank.org/curated/en/975081468244550798/Main-report

Borensztein, E., Gregorio, J. D., & Lee, J. W. (1998). How does foreign direct investment affect economic growth? Journal of International Economics, 45(10), 115-35. https://doi.org/10.1016/S0022-1996(97)00033-0

Chenery, H. B., & Watanabe, T. (1958). International comparison of the structure of production. Econometrica. 26, 487-521. https://doi.org/10.2307/1907514

Claus, I. (2003). New Zealand's production structure: An international comparison. NZ Treasury Working Paper 03/16.

De Mello, L. (1997). Foreign direct investment in developing countries and growth: A selective survey. Journal of Development Studies. 34, 1-34. https://doi.org/10.1080/00220389708422501

Dean, M., & Sebastia-Barriel, M. (2004). Why has world trade grown faster than world output? Bank of England Quarterly Bulletin. Autumn 2004. Retrieved May 21, 2018, from http://www.columbia.edu/~md3405/Other_Paper_1.pdf

Gangnes, B., & Assche, A. V. (2010). Global production networks in electronics and intra-Asian trade. Working Paper No. 10-4, University of Hawaii at Manoa. https://doi.org/10.2139/ssrn.1587978

Gao, X. (2017). Relative advantage production position and applications. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.

Ghibutiu, A. (2013). The changing landscape of international trade. Romanian Economic and Business Review. 8(2).

Gorg, H., & Greenaway, D. (2004). Much ado about nothing? Do domestic firms really benefit from foreign direct investment? The World Bank Research Observer, 19(2), 171-97. https://doi.org/10.1093/wbro/lkh019

Hirschman, A. O. (1958). The strategy of economic development. New Haven: Yale University Press.

Hirschman, A.O. (1977). A generalized linkage approach to development, with special reference to Staplesí, in M. Nash (ed.), Essays on economic development and cultural change in honour of Bert F. Hoselitz, Economic development and cultural change, 15(Supplement).

Hirschman, A. O. (1986). Linkages in economic development, in Rival views of market society and other recent essays. New York: Elisabeth Sifton Books - Viking.

Islam, I., & Chowdhury, A. (1997). Asia pacific economies: a survey. London: Routledge.

Jabbour, L. & Mucchielli, J. L. (2007). Technology transfer through vertical linkages: The case of the Spanish manufacturing industry. Journal of Applied Economics, 10(1), 115-36.

Javorcik, B. S. (2004). Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages. The American Economic Review. 94(3), 605-27. https://doi.org/10.1257/0002828041464605

Jones, L. P. (1976). The measurement of Hirschmanian linkages. Quarterly Journal of Economics. 90(2), 323-333. https://doi.org/10.2307/1884635

Kohpaiboon, A. (2010). Trade policy, industrialization, and developmental challenges: Experiences of Thailand. Paper presented at GEP workshop on trade policies and industrialization in Southeast Asia: What has happened and where do we go from here, hosted by the Leverhulme Centre for Research on Globalization and Economic Policy (GEP), University of Nottingham, Malaysia, 14 October, Kuala Lumpur Teaching Centre, the University of Nottingham Malaysia Campus.

Kong, Y. (2017). How does China's Labor Productivity Change as GVC Participation Deepening. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.

Kunnoot, S. & Chowdhury, A. (1992). Export-oriented industrialization and industrial deepening in Thailand: An input-output perspective. Economic bulletin for Asia and the Pacific, XLIII(1), 52-62.

Kunnoot, S. (2017). Dynamics of changing Thailand's trade structure in the context of changing world trade structure. Economics and Public Policy Journal. [in Thai], 8(16), 47-66.

Lauridsen, L. S. (2008). State, institutions and industrial development. Shaker Verlag.

Leontief, W. (1936). Quantitative input and output relations in the economic system and the United States. The review of economics and statistics. XVIII (3), 105-125. https://doi.org/10.2307/1927837

Meng, B., Ye, M., & Wei, S-J. (2017). Smile curves in global value chains: creation and distribution of value-added and job opportunities. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.

Muradovd, K. (2017). Determinants of country positioning in global value chains. 25th IIOA Conference in Atlantic City. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.

Nozaki, K., & Shu, J. (2017). FDI directed to Thailand by Chinese enterprises for circumlocutory export. Journal of Asian Development, 3(2), 43-59. https://doi.org/10.5296/jad.v3i2.11116

Pack, H. (2008). Asian successes vs. middle eastern failures: The role of technology transfer in economic Development. Issues in Science and Technology. Retrieved March 6, 2017, from http://issues.org/24-3/pack/

Rasmussen, P. N. (1956). Studies in Inter-sectoral Relations. Amsterdam: North-Holland.

Riad, N., Errico, L., Henn, C., Saborowski, C., Saito, M., & Turunen, J. (2012). Changing Patterns of global trade. IMF [International Monetary Fund]. Departmental Paper No. 12/01.

Ritchie, B. (2008). Economic upgrading in a state-coordinated, liberal market economy. Asia Pacific Journal of Management, 26(3), 435-57. https://doi.org/10.1007/s10490-008-9089-0

Rohana, K. & Zakariah A. R. (2007). Structural change, linkages vs. leakages in the Malaysian economy: 1991–2000. Paper presented at the 16th International Conference on Input-Output Techniques. 2–6 July. Retrieved May 15, 2017, from www.iioa.org/Conference/16thdownable percent20paper.html.

Schnabl, H. (1994). The evolution of production structures, analyzed by a multi-layer procedure. Economic Systems Research, 6(1), 51-68. https://doi.org/10.1080/09535319400000004

Schultz S. (1977). Approaches to identifying key sectors empirically by means of input-output analysis. Journal of Development Studies, 14. https://doi.org/10.1080/00220387708421663

Shuja', N., Wah, Y.B., Lazim, M.A., & Okamoto, N. (2008). Identifying key sectors of Malaysian economy: a comparison of unweighted and weighted approaches. Journal of the Department of Statistics, 1, 11-26.

UNCTAD [United Nations Conference on Trade and Development] (2013). World investment report 2013: Global value chains: Investment and trade for development. Retrieved August 8, 2016, from http://unctad.org/en/PublicationsLibrary/wir2013_en.pdf

UNCTAD [United Nations Conference on Trade and Development] (2014). Trade and development report, 2014: Global governance and policy space for development. RetrievedAugust 8, 2016, from http://unctad.org/en/PublicationsLibrary/tdr2014_en.pdf

van Dijck, P. (1987). Causes and characteristics of export-oriented industrialization. in H. Linnemann, (ed.) Export-oriented industrialization in developing countries. Manila: Singapore University Press, for Council for Asian Manpower Studies.

Verbruggen, H. (1987). Gains from export-oriented industrialization with special reference to South East Asia. in H. Linnemann, (ed.), Export-oriented industrialization in developing countries. Manila: Singapore University Press, for Council for Asian Manpower Studies.

Villanueva, L., & Jiang, X. (2017). The Myth of Benefit of Trade: the case of Mexico manufacturing sector. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.

Vogiatzoglou, K. (2017). International production sharing and export development: An examination for China and Vietnam. Journal of Asian Development, 3(2), 196-212. https://doi.org/10.5296/jad.v3i2.11561

World Bank (2009). Reshaping economic geography. World Development Report 2009. Retrieved May 21, 2018, from http://documents.worldbank.org/curated/en/730971468139804495/pdf/437380REVISED01BLIC1097808213760720.pdf

World Bank. (2018). World development indicators. Retrieved May 21, 2018, from http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators

WTO [World Trade Organization]. (2013). World trade report 2013: Factors shaping the future of world trade. WTO Publications. Retrieved October 11, 2017, from https://www.wto.org/english/res_e/booksp_e/world_trade_report13_e.pdf

WTO [World Trade Organization] (2014). World trade report 2014: Trade and development: recent trends and the role of the WTO. Retrieved October 11, 2017, from https://www.wto.org/english/res_e/booksp_e/world_trade_report14_e.pdf

Yean, T. S., & Heng, L. W. (2011). Industrial deepening in Malaysia: Policy lessons for developing countries. Asian Development Review. 28(2), 88-109.

Zhang, H., & Xia, M. (2017). The Effects of Technology and Division of Labor on Value Added Rates —An Analysis Based on Input-Output Model. 25th International Input-Output Conference & 7th Edition of the International School of I-O Analysis, June 19-23, 2017, Atlantic City, New Jersey, USA.




DOI: https://doi.org/10.5296/jad.v4i2.13200

Refbacks

  • There are currently no refbacks.




Journal of Asian Development  ISSN 2377-9594   E-mail: jad@macrothink.org

Copyright © Macrothink Institute 

To make sure that you can receive messages from us, please add the 'macrothink.org' domains to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', please check your 'spam' or 'junk' folder.