Foreign Capital And Industrialization In Malaysia (studies In The Economies Of East And South-east Asia)

This book was originally submitted for a doctoral degree at the University of Cambridge in 1992. I have benefited immensely from the advice and encouragement of numerous people in the course of writing the thesis. I owe my biggest debt to my supervisors, Michael Landesmann and John Sender, who were always willing to discuss my ideas until they accorded sufficient clarity. The role of foreign capital in developing economies is a controversial topic. Supporters view it as the epitome of industrial development, while critics regard it as an instrument of underdevelopment. Using both conventional and unconventional approaches, the author finds foreign capital to have played a positive role in Malaysia's industrialization. The branch- and industry-level analyses show generally strong pecuniary effects by foreign capital. Local-dominated branches and industries, however, show strong linkages with the domestic economy. The firm-level analysis tends to reveal strong technological spillovers from foreign capital. Both market and non-market mechanisms of coordination were instrumental in the development of technical and pecuniary links between foreign and local firms. The book closes with regulatory prescriptions to enhance positive spillovers. Governments are recommended to adopt screening methods that emphasize foreign firms' ability to stimulate the expansion of productive capacity and market outlets of local firms. This book examines foreign capital's role in stimulating industrialization. Using both conventional and unconventional approaches, the author finds foreign capital to have played a positive role in Malaysia's industrialization. The branch- and industry-level analyses show generally strong pecuniary effects by foreign capital. Local-dominated branches and industries, however, show strong linkages with the domestic economy. The firm-level analysis tends to reveal strong technological spillovers from foreign capital. The book closes with regulatory prescriptions to enhance positive spillovers. Front Matter....Pages i-xvi Introduction....Pages 1-4 Foreign Manufacturing Capital in Developing Economies....Pages 5-44 Manufacturing in Colonial Malaya....Pages 45-73 Manufacturing Branches....Pages 74-103 Manufacturing Industries....Pages 104-132 Foreign Firms....Pages 133-164 Local Firms....Pages 165-196 Conclusions and Policy Implications....Pages 197-206 Back Matter....Pages 207-263