Shafaeddin, Mehdi and Gallaher, Kevin (2008): Policies for Industrial Learning in China and Mexico: Neo-developmental vs. Neo-liberal approaches.
Download (283kB) | Preview
Abstract Previous work has shown that the results of both China and Mexico’s export-led market reforms over the past quarter century have been strikingly different. In contrast to China, Mexico has not managed to increase the value added of its exports of manufactured goods and has subsequently had a difficult time competing with China in world markets. Building on this previous work, in this paper we conduct a comparative analysis of the role of government policies in industrial learning and the development of capabilities of indigenous firms in Mexico and China in order to shed light on why China is so outperforming Mexico. We find that Mexico and China have had starkly different approaches to economic reform in this area. Mexico’s approach to reform has been a “neo-liberal” one, whereas China’s could be described as “neo-developmental.” Mexico’s hands-off approach to learning has resulted in a lack of development of endogenous capacity of domestic firms, little transfer of technology, negligible progress in the upgrading of industrial production, and little increase in value added of exports. By contrast, China has deployed a hands-on approach of targeting and nurturing domestic firms through a gradual and trial and error led set of government policies.
|Item Type:||MPRA Paper|
|Original Title:||Policies for Industrial Learning in China and Mexico: Neo-developmental vs. Neo-liberal approaches|
|Keywords:||International trade, development, competitiveness, value added, government policy, assembly operations|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O38 - Government Policy
O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O25 - Industrial Policy
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital
I - Health, Education, and Welfare > I0 - General
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L63 - Microelectronics ; Computers ; Communications Equipment
N - Economic History > N6 - Manufacturing and Construction > N65 - Asia including Middle East
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General
F - International Economics > F1 - Trade > F10 - General
L - Industrial Organization > L5 - Regulation and Industrial Policy > L52 - Industrial Policy ; Sectoral Planning Methods
I - Health, Education, and Welfare > I0 - General > I00 - General
O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O20 - General
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
P - Economic Systems > P5 - Comparative Economic Systems > P52 - Comparative Studies of Particular Economies
|Depositing User:||Mehdi Shafaeddin|
|Date Deposited:||14. Oct 2008 04:44|
|Last Modified:||29. Jul 2015 09:25|
Agosin, Manuel, and Roberto Machado. 2005. Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment? Oxford Development Studies 33 (2):149-162.
Aguayo Ayala, Francisco. 2000. La estructura industrial en el modelo de economia abierta en Mexico. Mexico: John D. and Catherine T. MacArthur Foundations.
Amsden, Alice. 2000. The Rise of the "Rest": Challenges to the West From Late-Industrializing Economies. Oxford: Oxford University Press.
Archibugi, D., and M. Michi. 1997. Technological Globalization or National System of Innovation? Futures 29 (2):121-137.
Arrow, K.J. 1962. The Economic Implications of Learning by Doing. Review of Economic Studies XXIX, 3 (80):155-173.
Baer, Werner. 1971. The Role of Government Enterprises in Latin America's Industrialization. In Fiscal Policy for Industrialization and Development in Latin America. Gainsville: University of Florida.
Baldwin, R.E. 1969. The Case against Infant-Industry Tariff Protection. Journal of Political Economy 77 (3):295-305.
Bell, M., B. Ross-Larson, and L.E. Westphal. 1984. Assessing the Performance of Infant Industries. Journal of Development Economics 16:101-128.
Bruton, H. 1998. A Reconsideration of Import Substitution. Journal of Economic Literature XXXVI:903-936.
CADELEC. 2004. Home Page (www.cadalec.com.mx). Cadena Productiva de la Electronica 2004 [cited April 2004].
Carrillo, J., and A. Hualde. 2002. La maquiladora electronica en Tijuana: hacia un cluster fronterizo. Revista Mexicana de Sociologia LXIV (3):125-171.
Chang, H.J. 2005. Why developing countries Need Tariffs: How WTO NAMA Negotiations Could Deny Developing Countries’ Right to a Future. Geneva: South Centre.
Chen, Kun, and Martin Kenney. 2008. Universities/Research Institutes and Regional Innovation Systems: The Cases of Beijing and Shenzhen. World Development 35 (6):1056-1074.
Chen, Y. 2008. Why do Multinational corporations locate their Advanced R&D Centres in Beijing. Journal of Development Studies 44 (5):622-644.
Cimoli, Mario. 2000. Developing Innovation Systems: Mexico in Global Perspective. New York and London: Continuum Books.
Cypher, James Martin. 1990. State and Capital in Mexico: Development Policy Since 1940. Boulder, CO: Westview Press.
Dedrick, Jason, and Kenneth L. Kraemer. 2002. Enter the dragon: China’s computer industry. Perspectives:28-36.
Dussel Peters, Enrique. 1999. Reflexiones sobre conceptos y experiencias internacionales de industrializacion regional. In Dinamica Regional y Competitividad Industrial, edited by C. R. D. a. E. D. Peters. Mexico City: Editorial JUS.
———. 2003. Industrial Policy, Regional Trends, and Structural Change in Mexico's Manufacturing Sector. In Confronting Development, Assessing Mexico's Economic and Social Policy Challenges, edited by K. J. Middlebrook, and Eduardo Zepeda. Stanford: Stanford University Press.
———. 2004. Gastos en Investigacion y Desarrollo e Inversion Extranjera Directa: Un Estudio a Nivel de Clases Economicas del Sector Manufacturero Mexicoano (1994 to 2000). In Nuevos Caminos Para el Desarollo Sustentable en Mexico, edited by A. Nadal. Mexico City.
———. 2005. Economic Opportunities and Challenges posed by China for Mexico and Central America: DIE (German Development Institute).
———. 2008. Invesion extranjera directa en Mexico: desempeño y potencial. Mexico City: Siglo XXI.
———, ed. 2007. Opportunidades en la relacion economica y commercial entre China y Mexico: CEPAL-UNAM.
Dussel Peters, Enrique, Juan Jose Palacios Lara, and Guillermo Woo Gomez. 2003. La industria Electronica en Mexico: Problematica, Perspectivas y Propuestas: D.R. Universidad de Guadalajara.
ECLAC. 1999. Foreign Direct Investment in Latin America, 1999. Santiago: United Nations.
———. 2001. Economic survey of Latin America and the Caribbean. Santiago: United Nations.
———. 2008. Economic survey of Latin America and the Caribbean. Santiago: United Nations.
Elkan, V. 1996. Catching up and slowing Down: Learning and Growth Pattern in an Open Economy. Journal of International Economy (41):95-111.
Ernest, D. 2007. Beyond the ‘Global Factory’ Model: Innovative capabilities for Upgrading China’s IT Industry. International Journal of Globalisation 3 (4):437-459.
Fan, P., X. Gao, and C. Watanabe. 2007. Technology Strategies of Innovative Chineese Domestic companies. International Journal Technology and Globalization 3 (4):344-363.
Fan, P., and C. Watanabe. 2006. Promoting Industrial Development through Technology Policy: Lessons from Japan and China. Technology in Society 28:303-320.
Federal Reserve Bank of Dallas. 2003. China: Awakening Giant, edited by F. R. B. o. Dallas. Dallas, Texas.
Fernández, J. 2000. The Macroeconomic Setting for Innovation. In Developing Innovation Systems: Mexico in Global Perspective, edited by M. Cimoli. New York and London: Continuum Books.
Gallagher, Kevin P., Juan Carlos Moreno-Brid, and Roberto Porzecanski. 2008. The Dynamism of Mexican Exports: Lost in (Chinese) Translation? World Development 36 (8):1365-1380.
Gallagher, Kevin P., and Roberto Porzecanski. 2008. Climbing up the Technology Ladder? High Technology Exports in China and Latin America. Berkeley, CA: Center for Latin American Studies, University of California Berkeley.
Gallagher, Kevin P., and Lyuba Zarsky. 2007. The Enclave Economy: Investment and Sustainable Development in Mexico’s Silicon Valley. Cambridge, MA: The MIT Press.
Gao, G., K. Hin Chai, J. Liu, and J. Li. 2007. Overcoming ‘Latecomer Disadvantages’ in Small and Medium-sized Firms: Evidence from China. International Journal Technology and Globalization 3 (4):364-383.
Görg, H., and David Greenaway. 2004. Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment. World Bank Research Observer 19 (2):171-197.
Gruber, H. 1992. The learning Curve in the Production of Semiconductor Memory Chips. Applied Economics (24):885-94.
Kehoe, TImothy J. 1995. A Review of Mexico's Trade Policy From 1982-1994. The World Economy.
Krugman, Paul. 1984. Import protection as Export Promotion: International Competition in the Presence of Oligopoly and Economics of Scale. In Monopolistic Competition and International Trade, edited by H. Kierzkowzki. Oxford: Clarendon Press.
Lall, Sanjaya. 1993. Policies for Building Technological Capabilities: Lesson from Asian Experience. Asian Development Review 11 (2):72-103.
———. 2005. Rethinking Industrial Strategy: The Role of the State in the Face of Globalization. In Putting Development First: The Importance of Policy Space in the WTO and IFIs, edited by K. P. Gallagher. London: Zed Books.
Lazonick, W. 1991. Business Organization and the Myth of Market Economy. New York and Melbourne: Cambridge University Press.
Li, S. and Xia, J. (2008) ; " The roles and Performance of State Firms and Non-State Firms in China's Economic Transition", World Development , Vol 36,No 1
Linder, S.B. 1961. An essay on trade and transformation. New York: John Wiley. Lucas, R.E. 1988. On the Mechanics of Economic development. Journal of Monetary Economics 22 (1):3-42.
Lustig, Nora. 1998. Mexico: The Remaking of an Economy. Washington, DC: The Brookings Institution.
Moore, R. 1997. Learning-by-Doing and Trade Policy in a Developing Economy. The Journal of Developing Areas (31):515-28.
MOST. 2006. National High Tech R&D Program (863 Program). Beijing: Ministry of Science and Technology of the People's Republic of China.
Naugthon, Barry. 2007. The Chinese Economy: Transitions and Growth. Cambridge, MA: MIT Press.
Nelson, R.R., and S.G. Winter. 1982. An Evolutionary Theory of Economic Change. Cambridge, MA and London, UK: Harvard University Press.
Otero, Gerardo. 1996. Neoliberal Reform and Politics in Mexico. In Neo-liberalism Revisited: Economic Restructuring and Mexico's Political Future, edited by G. Otero. Boulder, CO: Westview.
Palacios, Juan. 2001. Production Networks and Industrial Clustering in Developing Regions: Electronics Manufacturing in Guadalajara, Mexico. Guadalajara: University of Guadalajara.
Paus, Eva. 2005. Foreign Direct Investment, Development and Globalization, Can Costa Rica become Ireland? London: Palgrave.
Paus, Eva, and Kevin P. Gallagher. 2008. Missing Links: Foreign Investment and Industrial Development in Costa Rica and Mexico. Studies in Comparative International Development 43 (1).
People's Republic of China. 2006. Statistical Yearbook. Beijing. Pizarro, J., and Mehdi Shafaeddin. 2007. From Export promotion to Import substitution: comparative Experience of China and Mexico”.
Puyana, Alicia, and José Romero. 2006. Trade liberalization in Mexico: some Macroeconomic and Sectoral Impacts and Implications for Macroeconomic Policy. Paper read at International Development association (IDEAS) and UNDP conference on Post Liberalization constraints on Macroeconomic policies, 27-29 January, at Muttukadu, Chennai.
Ramírez, M. 1994. Public and Private Investment in Mexico, 1950-1990: An Empirical Analysis. Southern Economic Journal.
Reynolds, Clark W. 1970. The Mexican Economy. New Haven: Yale University Press. Rivera Vargas, Maria Isabel. 2002. Technology Transfer Via the University-Industry Relationship: The Case of Foreign High Technology Electronics Industry in Mexico's Silicon Valley. Edited by P. Albach, Studies in Higher Education. London: Routledge.
Rodrik, Dani. 1999. The New Global Economy and Developing Countries: Making Openness Work. Washington D.C.: Overseas Development Council. ———. 2006. What's So Special about China's Exports? China & World Economy 14 (5):1 - 19.
Romer, P.M. 1986. Increasing Returns and Long-run Growth. Journal of Political Economy 94 (5):1002-1037.
———. 1987. Growth Based on Increasing Returns Due to Specialization. The American Economic Review. Papers and Proceedings:52-62.
Romo Murillo, David. 2002. Derramas Tecnologicas de la Inversion Extranhera en la Industria Mexicana. Comercio Exterior 53 (3):230-43.
Sargent, John, and Linda Matthews. 2007. Capital Intensity, Technology Intensity, and Skill Development in Post China/WTO Maquiladorasand. World Development 36 (4):541-559.
———. 2007. China vs. Mexico in the Global EPZ Industry: Maquiladoras, FDI Quality, and Plant Mortality: University of Texas Pan American Center for Border Economic Studies.
———. 2008. Capital Intensity, Technology Intensity, and Skill Development in Post China/WTO Maquiladoras. World Development 36 (4):541-559.
Schmitz, H., and T. Hewitt. 1991. Learning to Raise Infants: A Case –Study in Industrial Policy. In States or Markets? Neo-liberalism and the Development Policy Debate, edited by C. Colclough and J. Manor. Oxford: Clarendon Press.
Shafaeddin, Mehdi. 2005. Friedrich List and the Infant Industry Argument. In The Pioneers of development Economics, Great Economist on Developmen, edited by K. S. Jomo. London and New York: Zed Books.
———. 2005. Towards an Alternative perspective on Trade and Industrial Policies. Development and Change 36 (6):1143-1162.
———. 2005. Trade Policy at the crossroads, recent experience of developing countries: Palgrave, Macmillan.
Shafaeddin, Mehdi, and Juan Pizarro. 2007. From Export Promotion To Import Substitution; Comparative Experience of China and Mexico: University Library of Munich, Germany.
Singh, A. 1993. The Plan, the Market and Evolutionary Economic Reform in China: UNCTAD.
Spooner, John G. The nouveau Lenovo wants to shake up the PC market’s status quo. ZDnet 2005 [cited March 3. Available from http://www.zdnet.com. Teubal, M. 1987. Innovation Performance, Learning and Government policy. Madison, WI: University of Wisconsin.
———. 1996. R&D and Technology Policy in NICs as Learning Processes. World Development 24 (3):449-460.
UNCTAD. 2008. World Investment Report. Geneva: United Nations.
UNCTC. 1992. Foreign Direct Investment and Industrial Restructuring in Mexico. New York: United Nations Centre on Transnational Corporations.
Unger, K., and M. Oloriz. 2000. Globalization of Production and Technology. In Developing Innovation Systems: Mexico in Global Perspective, edited by M. Cimoli. New York and London: Continuum Books.
USDOC. 2006. Technology Transfer to China, edited by B. o. I. a. Security: United States Department of Commerce.
———. 2006. Technology Transfer to China, edited by B. o. I. a. Security. Washington, DC: United States Department of Commerce.
Wade, Robert. 1990. Governing The Market Economic Theory and the Role of Government in East Asian Industrialization. Princeton, NJ: Princeton University Press.
Walsh, K. 2003. Foreign High-Tech R&D in china; Risks, Rewards, and Implications for US-china Relations. Washington, D.C.: The Henry L. Stimson Centre.
Wang, Q., and H. Wang. 2007. Industrial Standard based Competition and Chinese Firm Strategic Choice. International Journal of Globalisation 3 (4):422-436.
Williamson, J., ed. 1990. Latin American Adjustment: how Much Has Happened? Washington D.C.: Institute of International Economics.
Wise, Carol, ed. 1998. The Post-NAFTA Political Economy: Mexico and the Western Hemisphere. University Park, PA: The Pennsylvania State University Press.
Woo, Guillermo. 2001. Hacia la integracion de pequenas empresas en la industria electronica de Jalisco: dos casos de estudio. In Claroscuros: Integration Exitosa de las Pequenas y Medianas Empresas en Mexico, edited by E. Dussel. Mexico City: Editorial Jus.
World Bank. 2008. World Development Indicators: World Bank. Xiwei, Z., and Y. Xiangdong. 2007. Science and Technolgy Policy Reform and its Impact on China’s National Innovation System. Technology and Science (29):317-25.
Ye, M. 2008. Hand off Continual control: the Government Role in China’s Electronics Industries: Princeton University.
Yu, J. 2007. From Path-following to Path-Creating, some Paradigm Shift in China’s Catching- up. International Journal of Globalisation 3 (4):409-421.