LEARNING FROM EXPORTS : THE EXPERIENCE OF EAST ASIAN NIES

Abstract

The East Asian NIEs have been region of high as well as sustained economic growth. This growth has also been associated with the outward-orientation of the NIEs. With this in mind, the aim of the study is to analyse the various forms of learning by firms engaged in export activity and highlight how such learning processes have helped the NlEs achieve a high level of technological development. In uncovering the learning processes of export-oriented firms, institutional arrangements such as subcontracting, foreign direct investment, licensing and joint ventures will first be looked into. The types of learning discussed will be learning-by-doing, learning through training and changing, information exchange and finally learning by innovating. In the analysis of the four NIEs, namely South Korea, Taiwan, Hong Kong and Singapore, empirical studies are drawn from the electronics sector because of its importance to domestic exports. Other influences such as the role of government in establishing a competent infrastructure, providing macroeconomic stability, initiative in nurturing selected industries and investments in education and training are also examined. The empirical evidence of successful start-ups of electronic firms revealed a string of institutional arrangements that were crucial to raising their technological mastery. They include subcontracting arrangements such as own-equipment manufacture, foreign direct investment and licensing arrangements. These arrangements brought about learning effects of doing, training and changing. In the advance stages of learning, such as learning by innovating, firms have relied upon other measures such as joint ventures and research and development. Policy implications are drawn for developing countries regarding the suitability of adopting the institutional arrangements in NIEs. As such, comparisons of these various arrangements such as FDI and subcontracting within the NIEs will be re-examined to provide developing countries with the most suitable option. The similarity of government policies in the NIEs will also be used as guiding principles to define what form of positive reinforcements can be given to foster learning in firms.