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Trade, Foreign Firms, and Economic Policy in Indonesian and Thai Manufacturing

by 

William E. James and Eric D. Ramstetter

East-West Center Working Papers, Economics Series, No. 78

Publisher:

Honolulu: East-West Center

Publication Date: May 2005
Binding: paper
Pages: 27
Free Download: PDF

 

This paper first examines the rapid growth and changing composition of manufactured exports in Indonesia and Thailand, highlighting the rapid growth of office and computer machinery and electric machinery, somewhat slower growth of non-electric and transportation machinery, as well as the low growth of previously large exports of textiles apparel. Second, the important contributions of foreign multinational enterprises (MNEs) to export growth in the machinery industries, particularly in electric, office, and computing machinery, are documented. Third, the paper describes trade policies in all these industries in some detail, emphasizing how low protection was a key facilitator of rapid export growth in the MNEs that dominated the electric, office, and computing machinery industry, while high protection reduced incentives to export among MNEs in the transportation machinery industry.