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Production Networks and Industrial Clusters

Integrating Economies in Southeast Asia

Ikuo Kuroiwa and Toh Mun Heng

Publication Year: 2008

In this book, the focus is on how developing economies in Southeast Asia ride on the wave of globalization that brings about benefits and economic growth with expanding trade and investment linkages. The central concept used in this study is production networks and industrial clusters. With examples from Indonesia and Malaysia (electronics industry), Singapore (biomedical science industry), and Thailand (automotive industry), the book explains how production networks and industrial clusters have played crucial roles in their industrial development. This book also discusses the progress of regional economic cooperation as well as the development of supply chain management and logistics in Southeast Asia, which facilitate the extension of production networks into a broader area.

Published by: Institute of Southeast Asian Studies

Title Page, Copyright Page

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Table of Contents

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List of Tables

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pp. vii-ix

List of Figures

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pp. x-xii

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pp. xiii-xiv

In Southeast Asia, de facto economic integration preceded de jure economic integration. Unlike in Europe, firms in Southeast Asia have expanded their production networks without any formal framework of economic cooperation, and as a result, economies in Southeast Asia are...

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pp. xv

In April 2006, we started organizing the project entitled “Economic Integration in Southeast Asia: Location of Industries, Production Networks, and Development Strategy”. The project aims to investigate how the production networks and industrial clusters have advanced in...


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pp. xvi-xix

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1. Introduction

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pp. 1-29

Over the past few decades, the world economy has undergone many changes. Central to these changes is the globalization of the world economy. Globalization refers to the increasing integration of economies around the world, particularly through trade and financial flows...

I. Overview of the Production Networks and Industrial Clusters in Southeast Asia

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pp. 31

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2. The Mechanics of Production Networks in Southeast Asia: The Fragmentation Theory Approach

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pp. 33-53

At this point in time, Southeast Asia is truly an unique area in that it gets involved deeply with sophisticated international production networks extended to the whole East Asia. The formation of international production networks in East Asia has created an unprecedented pattern...

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3. Cross-Border Production Networks in Southeast Asia: Application of the International Input-Output Analysis

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pp. 54-85

In East Asia, cross-border production sharing, where stages of production leading up to final goods are fragmented and allocated to various countries depending on comparative advantages, has been a driving force of economic integration. As shown in other chapters in this volume, production...

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4. Industrial Clusters and Production Networks in Southeast Asia: Global Production Network Approach

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pp. 86-123

Economic development at the regional scale is becoming an increasingly complex phenomenon to be analysed satisfactorily. On the one hand, the accelerated globalization of economic activity has apparently rendered the region as the most significant site of competition across the...

II. Case Studies

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pp. 125

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5. Industrial Clustering of Electronics Firms in Indonesia and Malaysia

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pp. 127-157

Foreign-driven electronics manufacturing evolved in Southeast Asia when Japanese and American firms relocated assembly activities in Singapore, Malaysia and Philippines in the 1960s. Thailand from the 1970s, Indonesia from the 1980s and Vietnam from the late...

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6. The Biomedical Science (BMS) Industry in Singapore: Can It Plug into the Global Value Chain?

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pp. 158-195

Singapore is well-known to be a model economy that achieves remarkable economic growth over the last thirty years with heavy dependence on foreign direct investment. There is always a lingering question of whether such a model which yielded an average eight per cent annual GDP growth...

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7. The Development of Automotive Industry Clusters and Production Networks in Thailand

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pp. 196-256

The production and production capacity of automobiles in Thailand began to increase rapidly in the late 1980s after the appreciation of the yen. It then accelerated in the early 1990s due to the unprecedented economic boom and the government’s liberalization policy. After a sharp...

III. Drivers for the Expanding Production Networks

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pp. 257

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8. Supply Chain Management and Logistics in Southeast Asia

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pp. 259-300

International trade in services is becoming more and more important. In this paper, we focus on supply chain and logistics services in Southeast Asia. The supply chain concept is an extension of Michael Porter’s Value Chain Analysis that involves external entities linked to the production...

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9. Regional Economic Cooperation and Production Networks in Southeast Asia

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pp. 301-334

Prior to the Asian financial crisis in 1997, rapid and dynamic economic growth in Southeast Asia was facilitated through market-driven forces. Various regional economic cooperation initiatives and schemes were introduced, including an agreement on ASEAN Free Trade Area (AFTA) in 1992 which...

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10. Concluding Remarks: Implications for Public Policy

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pp. 335-339

Using concepts and insights of value chain analysis, production fragmentation, and cluster analysis, this book investigates the development and establishment of production networks in Southeast Asia. In particular, it has considered three case studies of industries which strive hard to...


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pp. 340-363

E-ISBN-13: 9789812307644
Print-ISBN-13: 9789812307637

Page Count: 363
Publication Year: 2008

Edition: 1

Research Areas


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Subject Headings

  • Southeast Asia -- Economic integration.
  • Business networks -- Southeast Asia.
  • Industrial clusters -- Southeast Asia.
  • Globalization -- Economic aspects -- Southeast Asia.
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