Industrial policy and automotive development: A comparative study of Thailand and Czechia

Kaoru Natsuda, John Thoburn, Jiří Blažek, Kozo Otsuka

Research output: Contribution to journalArticlepeer-review

Abstract

This paper investigates the effectiveness of industrial policy, and the role of state capacity to implement it, by making a comparison of automotive development in Thailand and Czechia, the largest vehicle producers in Southeast Asia and Central and Eastern Europe, respectively. The development of the industry in both countries primarily relied on foreign investment, despite Czechia’s long earlier history of domestic automotive development. The countries, however, have used very different types of industrial policy. Thailand introduced a series of vertical (sector-specific) industrial policies, pursuing a proactive industrial development strategy with state intervention, continuing even under the restrictions on trade-related policy measures imposed by the WTO since 2000. In contrast, Czechia has employed mostly horizontal (non-sector-specific) industrial policies with less state intervention, influenced by the restrictions of the European Union. Although both countries achieved considerable output and export growth, Thailand has a deeper and more locally owned supply chain. Thailand’s imaginative use of de facto local content requirements in connection with its product champion policy is instructive.

Original languageEnglish
Pages (from-to)212-238
Number of pages27
JournalEurasian Geography and Economics
Volume63
Issue number2
Early online date4 Nov 2020
DOIs
Publication statusPublished - Mar 2022

Keywords

  • Automotive
  • Czechia
  • global production networks
  • global value chains
  • industrial policy
  • Thailand

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