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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 29, No. 1, pp.113-149
ISSN: 1225-0279 (Print)
Print publication date 29 Feb 2016
Received 23 Oct 2015 Revised 14 Dec 2015 Accepted 28 Jan 2016

Emergence of Innovative Manufacturing Firms across Asian Countries

Lakhwinder Singh ; Anita Gill
Corresponding author, Professor, Department of Economics and Coordinator, Centre for Development Economics and Innovation Studies, Punjabi University, Patiala 147002, India, Tel: 91-9888755642, Fax: 91-175-228-3073 lakhwindergill@pbi.ac.in
Professor of Economics, Department of Distance Education, Punjabi University, Patiala 147002, India, Tel: 91-9888968462, Fax: 91-175-2283073 anitagill@pbi.ac.in

JEL Classification: O1, O2, O3, L6, F6, D8

Abstract

The recent phase of globalization has witnessed increasing influence of Asian countries in the global economy. This is supported by the rise of Asian firms and their increasing presence in economic activities across the globe through innovations in manufacturing. This paper attempts to trace the rise of Asian firms and their innovation capabilities while examining the theory of the growth of the firm and empirical literature. The comparative analysis of innovations across innovative manufacturing firms of seven Asian countries-Japan, South Korea, Malaysia, Indonesia, Philippines, China and India is based on data collected through Oslo manual approach survey conducted and compiled by UNESCO in 2013. This unique data set covers technological and social innovations which is more comprehensive and expands the scope of the concept of innovations. Important empirical evidence that has emerged from the analysis is that Asian manufacturing firms are having higher level of social innovations than technological innovations. Level of economic development is positively correlated to transition from process to product innovations across firms of both developed and developing countries. The low variations across active innovative firms in product and process innovations imply that technological innovations are stable and rising in Asia. This is supported by high degree of intensity of in-house R&D expenditure. The most important barrier to innovative and non innovative manufacturing firms is the deficiency of internal and external finances except firms of Japan and South Korea. The innovation environmental constraints are more visible across Asian firms where the national innovation system is at nascent phase. The finding based public policy suggestion is that the public policy should accord high priority in investing higher proportion of resources in innovations to relieve the firms from such constraints.

Keywords:

Systems of innovations, Rise of Asian firms, Technological innovations, Social innovations, Public policy, Asia, manufacturing innovations, Internationalization of firms

Acknowledgments

This is the revised version of the paper presented in the international Symposium of Seoul Journal of Economics, Seoul National University, Seoul during October 30-31, 2015. The authors are grateful for constructive discussions and suggestions to the participants in the symposium particularly of Professors Djun Kil Kim, and Keun Lee. Many thanks go to Ms. Manjinder Kaur for her help in organizing and processing data. However, the usual disclaimer applies.

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