Liang-Chih Chen

Industrial upgrading and interaction between the advanced small south and China: the case of Taiwan’s machine tool industry

ABSTRACT Existing studies of late industrialization emphasize the significance of learning mechanisms associated with North–South linkages for the technological and manufacturing capabilities of the South. With reference to investments by Taiwan’s machine tool industry in China, this paper shows how and why a small and relatively advanced latecomer in the South (Taiwan) developed multiple capabilities by exploring and exploiting the technological and market resources of a relatively laggard, late industrializing counterpart with a large domestic market (China). In this way, it demonstrates the significance of South–South interactions and a wider range of capabilities.