Industrial deepening in Malaysia: Policy lessons for developing countries

Siew Yean Tham, Loke Wai Heng

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The Malaysian economy has undergone substantial industrial transformation, shifting from primary commodity production to manufacturing in slightly more than 5 decades since achieving independence. However, efforts to deepen manufacturing development have not succeeded in nurturing a critical mass of domestic entrepreneurs with indigenous innovative capacities as industrialization continues to be dependent on imported technology and capital. Instead, the manufacturing sector is facing premature deindustrialization. In view of these developments, this study aims to assess the extent of industrial deepening in a country through the development of linkages, as well as the key factors that have contributed to this. This has important policy lessons for other developing countries that are following similar export-oriented, foreign direct investment-led strategies for their industrial development. The main findings of this study indicate that while trade and investment policies have contributed to the development of the manufacturing sector, they have also fostered closer integration with the rest of the world rather than within the domestic economy. The electrical and electronics subsector has relatively weaker backward linkages than other subsectors in the economy. Deepening internal integration requires complementary labor, human capital, and technology policies that can facilitate the development of linkages in the manufacturing sector.

Original languageEnglish
Pages (from-to)88-109
Number of pages22
JournalAsian Development Review
Volume28
Issue number2
Publication statusPublished - Dec 2011

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Malaysia
manufacturing
developing world
developing country
manufacturing sector
economy
commodity production
deindustrialization
investment policy
technology policy
de-industrialization
industrial development
foreign direct investment
human capital
trade policy
entrepreneur
direct investment
industrialization
foreign investment
commodity

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

Cite this

Industrial deepening in Malaysia : Policy lessons for developing countries. / Tham, Siew Yean; Heng, Loke Wai.

In: Asian Development Review, Vol. 28, No. 2, 12.2011, p. 88-109.

Research output: Contribution to journalArticle

Tham, Siew Yean ; Heng, Loke Wai. / Industrial deepening in Malaysia : Policy lessons for developing countries. In: Asian Development Review. 2011 ; Vol. 28, No. 2. pp. 88-109.
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