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The Automotive Value Chain in Thailand

Author

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  • Ikuo Kuroiwa

    (Institute of Developing Economies Japan External Trade Organization(IDE-JETRO))

Abstract

A country's participation in global value chains (GVCs) is increasingly becoming important as a strategy for economic development. However, participation in GVCs alone is not sufficient. Industrial deepening - or the formation of backward linkages by creating robust supplier bases - is necessary to sustain economic growth. This paper explores how the automotive value chain has evolved in Thailand since the 1990s. Trade in value-added analysis is applied to the Organisation for Economic Cooperation and Development's Inter-Country Input-Output data. Moreover, the concept of value chain mapping is introduced to illustrate upstream and downstream transactions of goods and services along the value chain. Results show that international linkages were strengthened because of the expanding production networks in Southeast Asia. On the other hand, domestic linkages and domestic content started to decline after a certain point. These results suggest that the benefits of specialisation and exchange have outweighed those of agglomeration in recent decades.

Suggested Citation

  • Ikuo Kuroiwa, 2017. "The Automotive Value Chain in Thailand," Working Papers DP-2016-33, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2016-33
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    References listed on IDEAS

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    1. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    2. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who produces for whom in the world economy?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(4), pages 1403-1437, November.
    3. Kuroiwa, Ikuo, 2015. "Industrial deepening in East Asia," IDE Discussion Papers 489, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Kuroiwa, Ikuo, 2016. "Mapping agricultural value chains with international input-output data," IDE Discussion Papers 623, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171, Elsevier.
    6. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
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    Cited by:

    1. Bank of Thailand, 2018. "Weighing up Thailand’s benefits from global value chains," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and deglobalisation, volume 100, pages 345-354, Bank for International Settlements.

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    More about this item

    Keywords

    valu chain mapping; trade in value added; automotive value chain;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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