BRC RESEARCH REPORT No. 29

Impacts of Innovation on
Firm Performance and Industrial Developmentin East Asia

March 2021

Edited byKoichiro KIMURA
Bangkok Research Center, JETRO Bangkok
IDE-JETRO

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Bangkok Research Center, JETRO Bangkok / IDE-JETRO
16th Fl. of Nantawan Bldg., 161 Ratchadamri Rd., Pathumwan, Bangkok 10330, Thailand

Copyright © 2021 by author(s)No part of this publication may be reproduced without the prior permission of the author(s).

Contents

Preface
Contributors

Chapter 1
Innovation and Competition in Thailand: Case Studies of Electronics and………… 1

Plastics Industries

Saowaruj RATTANAKHAMFU and Warakorn AWUTPANYAKUL

Chapter 2
The Implications of R&D Intensity for Innovation Efficiency and Firm………… 27
Performance: Comparing China, Japan, U.S.
Zhengyu GONG and Gary H. JEFFERSON

Chapter 3
Technology Development and Similarities…………56

Koichiro KIMURA, Hiroshi MATSUI, Kazuyuki MOTOHASHI,Shun KAIDA, and Janthorn SINTHUPUNDAJAPreface

Since research and development (R&D) investments and innovation activities of East
Asian firms have rapidly become active, it has also become important to examine theirimpacts on firm performance and industrial development as well as their factors andbackgrounds. In this report, we will focus on the impacts on firm performance in the firsttwo chapters, and those on industrial development in the last one.
First, Rattanakhamfu and Awutpanyakul will show that Thai innovativeelectronics and plastic firms enjoy higher market power than other firms in the sameindustries by comparing between the Lerner index of the firms and industries. Next, Gongand Jefferson will show that low R&D intensity Chinese firms are likely to yield higher
performance in terms of Tobin’s Q than high R&D intensity ones due to advantages forthe more efficient R&D systems. Therefore, firms need to focus not only on the results ofinnovation activities, but also on the efficiency of them.
Finally, Kimura, Matsui, Motohashi, Kaida, and Sinthupundaja will show that amajor Chinese robotics firm is diversifying their technologies within the same industry
by making their technology position similar to a first-mover firm’s one, while at the sametime differentiating it. Consequently, the learning and differentiation of technologies
through competition among firms could lead to the development of technologies within
an industry as a whole. We would be glad if our chapters could contribute to a better
understanding of the impacts of innovation, which occurs in complicated paths.
This report is the result of “Innovation and Industrial Structure in Asia” research
project organized at the Institute of Developing Economies (IDE), JETRO, from April
2020 to March 2021.

Koichiro KIMURAContributors

Koichiro KIMURA (Editor; Chapter 3)
Associate Senior Research Fellow, Bangkok Research Center, JETRO
Bangkok, and the Institute of Developing Economies (IDE), JETRO, Japan
Saowaruj RATTANAKHAMFU (Chapter 1)
Senior Research Fellow, Thailand Development Research Institute (TDRI)
Warakorn AWUTPANYAKUL (Chapter 1)
Researcher, Thailand Development Research Institute (TDRI)
Zhenyu GONG (Chapter 2)
Ph.D. Program, Brandeis University, the U.S.
Gary H. JEFFERSON (Chapter 2)
Professor, Brandeis University, the U.S.
Hiroshi MATSUI (Chapter 3)
Manager, ABeam Consulting (Thailand) Ltd.
Kazuyuki MOTOHASHI (Chapter 3)
Professor, The University of Tokyo, and Visiting Scholar, King Mongkut’s
University of Technology Thonburi (KMUTT), Thailand
Shun KAIDA (Chapter 3)
Senior Consultant, ABeam Consulting Ltd., Japan
Janthorn SINTHUPUNDAJA (Chapter 3)
Consultant, ABeam Consulting (Thailand) Ltd.