The last few decades have witnessed the Association of Southeast Asian Nations (ASEAN) successfully attracting significant amounts of foreign direct investment (FDI) and gradually establishing linkages in global value chains (GVCs) with the most advanced economies in the world. Using data at the country, sector and functional level referring to eight ASEAN member states over the 2005-2015 period, this dissertation examines the roles played by FDI, international trade and participation in GVCs as determinants of economic upgrading opportunities, with the aim of providing an in-depth analysis and policy implications for this emerging region of the world economy. The work starts by introducing a detailed conceptual and empirical background to serve as the theoretical foundation for subsequent analyses. The thesis then puts under the spotlight the nature and evolution of ASEAN’s activities in GVCs, and the essential role played by foreign direct investments, trade in value added and industrial policy in favouring economic upgrading of ASEAN’s manufacturing industry. Three main sets of results are obtained from the empirical analyses conducted in this dissertation. First, the thesis finds that attracting FDI and improving local technological capabilities do favour upgrading in GVCs for ASEAN member states. However, upgrading effects substantially differ according to investment origins, motivations and types of activities along value chains. Second, the thesis shows the different impact of imports of intermediate inputs from major trade partners on ASEAN’s upgrading. In particular, it finds that while China has become the main trade partner of ASEAN and positively impacts on domestic value added of recipient economies, it is imports from the US that has the strongest impact on the sophistication of exports. Moreover, the effects of imported inputs are found to be significantly different across countries and sectors; and are positively affected by the continued efforts undertaken by ASEAN to foster the regional integration process. Third, it is shown that two key policy instruments that have long been examined in the literature, namely Free Trade Agreements and the attraction of FDI in Special Economic Zones (SEZ) have remarkably contrasting impacts on industrial upgrading, with an astonishing overall adverse effect from SEZ.

ASEAN Manufacturing Industry in Global Value Chains: Analysis and Policy Implications

Hoang Nam Nguyen
2021

Abstract

The last few decades have witnessed the Association of Southeast Asian Nations (ASEAN) successfully attracting significant amounts of foreign direct investment (FDI) and gradually establishing linkages in global value chains (GVCs) with the most advanced economies in the world. Using data at the country, sector and functional level referring to eight ASEAN member states over the 2005-2015 period, this dissertation examines the roles played by FDI, international trade and participation in GVCs as determinants of economic upgrading opportunities, with the aim of providing an in-depth analysis and policy implications for this emerging region of the world economy. The work starts by introducing a detailed conceptual and empirical background to serve as the theoretical foundation for subsequent analyses. The thesis then puts under the spotlight the nature and evolution of ASEAN’s activities in GVCs, and the essential role played by foreign direct investments, trade in value added and industrial policy in favouring economic upgrading of ASEAN’s manufacturing industry. Three main sets of results are obtained from the empirical analyses conducted in this dissertation. First, the thesis finds that attracting FDI and improving local technological capabilities do favour upgrading in GVCs for ASEAN member states. However, upgrading effects substantially differ according to investment origins, motivations and types of activities along value chains. Second, the thesis shows the different impact of imports of intermediate inputs from major trade partners on ASEAN’s upgrading. In particular, it finds that while China has become the main trade partner of ASEAN and positively impacts on domestic value added of recipient economies, it is imports from the US that has the strongest impact on the sophistication of exports. Moreover, the effects of imported inputs are found to be significantly different across countries and sectors; and are positively affected by the continued efforts undertaken by ASEAN to foster the regional integration process. Third, it is shown that two key policy instruments that have long been examined in the literature, namely Free Trade Agreements and the attraction of FDI in Special Economic Zones (SEZ) have remarkably contrasting impacts on industrial upgrading, with an astonishing overall adverse effect from SEZ.
2021
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11576/2689336
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