Discussion Papers

Institutional Support, Technological Capabilities and Domestic Linkages in the Semiconductor Industry in Malaysia

By Rajah Rasiah and Yap Xiao Shan

ERIA Discussion Paper 2015-16

Posted: February 2015


This article examines the relationship between host-site institutional support and regional trade linkages on firm-level technological capabilities in the semiconductor industry in Malaysia. An evolutionary perspective was used to measure technological capabilities using knowledge embodied in machinery, organization, processes and products. The results show that host-site institutional support, and regional trade linkages were correlated with technological upgrading. The relationship between host-site institutional support and technological upgrading was stronger than that between regional trade linkages and technological upgrading. The results show that host site institutional support is more important than regional integration in influencing firms' capacity to upgrade their technological capabilities.


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