The Emerging Economy-Industrial Complex

This Masters Thesis is a synthesis of two papers that address how changes in global industrial structures affect regional-specific industrial organization. The first paper is a characterization of the response of Indonesian manufacturing firms to the Asian financial crisis in 1997. The second paper is a characterization of the how to induce a response from firms (specifically multinational seed companies) with research capacities in the agricultural biotechnology sector in developing countries. The lessons from both papers are broadly centered on effective growth policies and it?s relation of private sector and foreign direct investments. Specifically, an economic development agenda concentrated only on the private sector will not necessarily guarantee that firms will take advantage of ideal economic scenarios. As the case of Indonesian firms demonstrated, uncertainty and perceptions of the local economy affect the extent to which the private sector should have led growth through exports during devaluation of the Indonesian currency. In contrast, the capacity for research and development in agricultural biotechnology is grossly underdeveloped in Africa, and limited to only a few countries. The massive intellectual capacity of a largely consolidated seed industry actually becomes beneficial for firms to take greater risks and spur sector development. Reading the following papers as a policy maker, one would thus gain valuable insight to the complexities of industrial development. As a researcher and student, one should be interested in these studies as a call attention to areas with potential for future research. The implications of research into firm-level response of Indonesian export firms will greatly affect future empirical work on trade theory and economic growth policies because it highlights a circumstance that runs somewhat contrary to trade theory predictions. Policies need to take into account the extent to firm response to financial crisis and ability to face adverse economic situations. The immediacy of riskanalysis research in the biotechnology sector in Africa is equally important and unexhaustive. If foreign investments are to play an important role in the development strategy for African countries, it must take into account the decision making processes of firms willing to take on high-cost projects with low immediate returns