and kept increasing, while the export of parts stumbled in 1990. While the Korean HEEI mainly exports AV products to Japan, household electric products export (excluding AV) takes a large share in the export of Thailand's HEEI. The export of refrigerators is also noticeable. As for the export of parts, intermediate products like television picture tubes are reported to be major items. In the case of the IC industry, the U.S. is a major market for Thailand.

In table 13 and 14, we can also examine a competitive index of Thailand's HEEI. Export specialization in household electric products was occurring around 1987 and a specialization in the export of AV products was occurring around 1988. Thailand's export specialization curves seem to follow the Flying-Wild-Geese formation, in which the country was catching up with Japan and Korea.

(3) Korea and Thailand (Table 9 - Table 10)

An upward trend in the HEEI export from Korea to Thailand is noticeable since 1986. The export of parts has been taking a large share. The share of AV products has been increasing in finished HEE products. The total volume of trade is still smaller than the HEEI export from Korea to Japan.

The export from Thailand to Korea also has an upward trend, although with fluctuations. In this case, the export of parts has taken a large share and a significant increase occurred in around 1987.

## Foreign Direct Investment

(1) Japanese investment in Korea

Trends in foreign direct investment of the Japanese HEEI to Korea and Thailand are shown in table 15. It shows the two booms in the first half of the 1970's and the second half of the 1980's, mainly in electronic parts.

We can go back to days of the 1960's to trace the development process of the HEEI in Korea $ ^{1} $ . The government prohibited the imports of radio parts in 1961 as the start of its import substitution policy and the export of radio sets started in 1962 and the assembly production of black and white TV sets started in 1966.

However, it was the establishment of joint-venture enterprises with foreign capitals under the 1969 Foreign Capital Introduction Act that gave opportunities for the Korean HEEI to make a rapid progress. In the same year, TOSHIBA (transistor production), SANYO (transistor and TV production) and NEC (television picture tube production) started local production in Korea. Table 15 indicates the flows of Japanese investments in electronic parts industry in Korea. They increased significantly in the first half of the 1970's. The Japanese enterprises were obliged to export all their products in return for getting government authorization for investments and privileges such as tax exemptions. The export promotion policy therefore gave greatest impacts to the Korean HEEI.

On the other hand, local corporate groups started to enter into the HEEI market in the beginning of the 1970's. However, they had little business relations with the foreign affiliated parts makers in Korea. Therefore, they had to depend on technologies from Japanese enterprises or on the import of production equipment and parts from Japan.

The second wave of investment flows from Japan in the parts industry started in the period of the Yen appreciation brought by the Plaza Accord in 1985 (Table 15). At this time,