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Linkage effects and trade and productive diversification: an analysis of Indonesia, Malaysia and Thailand between 1980 and 2010

Abstract

This article examines the relationship between linkage effects and trade and productive manufacturing diversification in developing economies that initially specialized in natural resources. This analysis is carried out both theoretically and empirically, by examining the cases of Indonesia, Malaysia and Thailand through input-output matrices and the investigation of the institutional framework. The article concludes that there were linkage effects from the specialization in primary products to resource-based industries. This did not however take place to the point of sustaining industrial sophistication and overcoming structural heterogeneity, besides not being the main explanation for the fast pace of industrialization achieved by these economies.

Keywords:
Linkage effects; Productive structure; External insertion; Economic development; SEANICs

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