Regional concentration and the location behavior of manufacturing firms in the electronics and automobile industries in Thailand

The purpose of this study is to investigate economic concentration and industrial location problems in Thailand. The study demonstrates that concentration trends of non-agricultural employment in Thailand are declining, resulting from the deconcentration trends in Bangkok. Regression results show that the rising regional wage in Bangkok, relative to other regions, can cause regional deconcentration of employment in many sectors. In order to analyze characteristics of manufacturing firms locating within and outside Bangkok, the electronics and automobile industries are selected for the case study. Both binary and multinomial logit estimations, categorized by regions, are conducted in order to examine the characteristics of firms which tend to locate in each region, and the effect of relative regional wage in firms\u27 location decisions in each region. The results show that specific firm types likely to locate in Bangkok are those benefiting from the local market, information of markets and networks, or local specific skills. These are: domestic-oriented type of production run by foreign firms in both industries, Thai firms focusing on export market in the case of electronics, as well as firms requiring local highly skilled labor in the case of automobile. Firm types likely to locate in the Bangkok vicinity region, for both industries, are export-oriented firms with high foreign ownership, in addition to firms using a high proportion of unskilled labor, for the automobile. Large firms tend to locate outside Bangkok and the vicinity region (BMR), in the case of electronics; while no result is found outside the BMR, in the case of automobile. The effects of regional wages on firms\u27 location choices for both industries are similar. While high wage in Bangkok cannot diminish the likelihood of particular types of firms to locate there, cheaper regional wages can induce other types of firms to locate outside Bangkok significantly. The results from both industries indicate that different types of firms weigh the relative importance between local agglomeration economies and regional factor costs differently. Compared to the electronics industry, the industrial location pattern of the automobile industry is more spatially concentrated. Location studies, taking sectoral and firm characteristics into account, are recommended

Regional concentration and the location behavior of manufacturing firms in the electronics and automobile industries in Thailand

The purpose of this study is to investigate economic concentration and industrial location problems in Thailand. The study demonstrates that concentration trends of non-agricultural employment in Thailand are declining, resulting from the deconcentration trends in Bangkok. Regression results show that the rising regional wage in Bangkok, relative to other regions, can cause regional deconcentration of employment in many sectors. In order to analyze characteristics of manufacturing firms locating within and outside Bangkok, the electronics and automobile industries are selected for the case study. Both binary and multinomial logit estimations, categorized by regions, are conducted in order to examine the characteristics of firms which tend to locate in each region, and the effect of relative regional wage in firms\u27 location decisions in each region. The results show that specific firm types likely to locate in Bangkok are those benefiting from the local market, information of markets and networks, or local specific skills. These are: domestic-oriented type of production run by foreign firms in both industries, Thai firms focusing on export market in the case of electronics, as well as firms requiring local highly skilled labor in the case of automobile. Firm types likely to locate in the Bangkok vicinity region, for both industries, are export-oriented firms with high foreign ownership, in addition to firms using a high proportion of unskilled labor, for the automobile. Large firms tend to locate outside Bangkok and the vicinity region (BMR), in the case of electronics; while no result is found outside the BMR, in the case of automobile. The effects of regional wages on firms\u27 location choices for both industries are similar. While high wage in Bangkok cannot diminish the likelihood of particular types of firms to locate there, cheaper regional wages can induce other types of firms to locate outside Bangkok significantly. The results from both industries indicate that different types of firms weigh the relative importance between local agglomeration economies and regional factor costs differently. Compared to the electronics industry, the industrial location pattern of the automobile industry is more spatially concentrated. Location studies, taking sectoral and firm characteristics into account, are recommended

Industrial location behaviour and regional restructuring within the Fifth 'Tiger' Economy: evidence from the Thai electronics industry

The paper investigates the location behaviour of firms in the electronics industry in Thailand. Our approach is to use a logit model in order to analyse how the characteristics of the firms and the regions are related to the location decisions of firms in these sectors. The logit results throw some light on the question of the nature of agglomeration behaviour in a developing economy in which the national spatial industrial structure is dominated by a single primal city. Our conclusions provide tentative support for a product-cycle argument of industrial concentration and dispersion.

The territorialisation of rural Thailand: between localism, nationalism and globalism

This paper shows how the control over land and resources in rural Thailand in the present phase of globalisation is a struggle between economic, social and political powers at the global, national and local level. Ever since Thailand was integrated into the world market by signing the Bowring Treaty in 1855 and especially after it embarked on rapid development in the late 1950s economic growth has changed the rural (and urban) landscapes. Since the mid 1980s, export-oriented manufacturing industry has led Thailand into the present phase of globalisation by further liberalising its economy and increasingly leaving natural resources open to be exploited. Two socio-political tendencies have been competing in influencing territorialisation of rural Thailand. However, decentralisation and devolution of power promote local institutions that emphasise various degrees of self-reliance and sustainable utilisation of natural resources opposed to further liberalisation on the world market as promoted by national and transnational businesses and global institutions like the WTO Agreement on Agriculture. Territorialisation of rural Thailand and management of local natural resources is therefore contested space where institutions at the local level operate in a contextual framework of policies formulated at the global level and implemented through national government agencies. The conflicts inherent in the multi-layered process of local territorialisation are blurred by the different institutions at different geographical levels having different perceptions of the environment. Political ecology or political environmental geography - promoted by a 'counter-coalition' of potentially like-minded actors operates on various levels in developing alternative territorialisation premised on socially just and sustainable livelihoods. Such approaches, it is proposed, are crucial to the study of local development in the context of globalisation. Copyright 2003 by the Royal Dutch Geographical Society KNAG.