Production Networks and Technology Transfer: ―Empirical Analysis Based on Survey Data for Companies in Southeast Asia―

Southeast Asian countries are active in infrastructure development and the introduction of preferential tax measures for trade and investment. Such policy measures have been implemented in anticipation of the development of new industries and industrial sophistication as well as the growth of local companies through the introduction of foreign technologies. Consequently, Southeast Asian countries have achieved high economic growth, even though the development of local companies has not necessarily been sufficient. There is a gap between the macroeconomic and microeconomic situations in terms of policy achievement, presumably because technologies transferred through trade and investment go mainly to multinational companies’ subsidiaries, rather than to local companies, in Southeast Asia. If local companies cannot be expected to improve their capabilities for lack of learning ability, multinational companies will not make efforts to transfer technologies to them. In consideration of this problem, this paper first analyzes the correlation between inter-company technology transfer and innovation. As a result, it is confirmed that technical assistance brings beneficial effects mainly to process innovation, while developing cooperative inter-company relationships is essential for promoting product innovation. Next, the paper analyzes the correlation between continuous improvement (i.e., Kaizen) activities and technology transfer and makes clear the effectiveness of continuous improvement activities in the development of companies’ basic learning ability and cooperation ability. These findings suggest the importance of international cooperation for local companies in introducing continuous improvement activities and developing inter-company cooperation capacity to promote innovations.