Drivers Enabling Developing Countries to Enter High-Tech Production Networks through Global Production Sharing: Evidence from Malaysia, Taiwan, and Vietnam

Abstract

Since the 1960s, the world has witnessed the rise of several East Asian nations as economic powerhouses. One of the main contributing factors of their success is their decision to create policies that allowed them to enter high-tech global production networks. Today, other countries are attempting to do the same by replicating the success of these East Asian nations, but they have had considerably less success. Thus, a study that investigates the drivers of developing countries entering global production networks would be of great use to policymakers in other countries. Hence, with the support of evidence from Vietnam, Malaysia, and Taiwan, this study proposes policy options (government support, science parks, tax, and other incentives, high- and semi-skilled labor, infrastructure development roadmaps, and free trade agreements) that are necessary to initiate and drive the entrance of a developing country into high-tech global production networks. Government support was identified as the main driver that determines the outcome of an effort to enter. Infrastructure development roadmap and free trade agreements were identified as optional. However, it is recommended that governments consider the two optional factors during policy formation, as they could complement the other factors.