## NOTES

1. Asian NIEs = Hong Kong, Singapore, South Korea and Taiwan; “ASEAN4” = Thailand, Malaysia, Indonesia and Philippines.

2. For the “PC” theory, see R. Vernon (1966) and for the “CPC” theory see I. Yamazawa (1984) and (1990). Note that the “CPC” theory was initially introduced by N. Akamatsu under the name of “Gankou Keitai” (Flying-Wild-Geese) and published for the first time in English in 1961 (Akamatsu, 1961).

3. According to Yamazawa (1990), an important role is also played by FDI, which contribute to accelerate the process of “catching-up”.

4. International data are usually available with an average delay of five years.

5. “Product engineering” is an activity devoted to transform R&D into products for the market, while “product development” aims to increase the market shares by raising quality standards, introducing new varieties and creating new demand.

6. Paradoxically, from the interviews carried on in Malaysia to part supplying firms, has emerged that one of the reasons of the production relocation from Japan lays on low transport cost. For example, the cubic meter cost of a shipment by truck from Tokyo to Osaka results more expensive than an air shipment from Tokyo to Kuala Lumpur.

7. The direction of FDI is also typical of the catching-up sequence among the Asian countries. Japan is the traditional investor country (towards the NIEs and the ASEAN4), while ASEAN4 countries are the typical recipient countries (from Japan and the NIEs, although Malaysia and Thailand are recently investing in less developed countries like China, Cambodia or Vietnam). The intermediate place is covered by the NIEs, which are shifting from the position of net borrowers (from Japan) to that of net investors (especially Taiwan and South Korea towards the ASEAN4).

8. In particular, computer and telecommunication are the industries where the US technology is still more advanced than the Japanese one.

9. For example, skill formation in the Japanese production system relies on the “on-the-job-training” which is not as fast as the schools-teaching method of the “off-the-job-training”. For a specific analysis of technology transfer and the labor market conditions, see Koike and Takenori (1990).

10. Furthermore, local authorities may allow 100% foreign owned property or may choose to regulate the equity sharing, by requiring a certain minimum presence of domestic capital. Such a stricter policy may yield two opposite effects on the process of technology transfer. One is negative, due to the probably reduced inflow of FDI. Another one is positive, as foreign companies will be somehow forced to transfer their knowledge to local investors.

11. See for example the case of Malaysia in sections 3 and 4.

12. Some of the main differences regard the role of SMEs or the weight of “light” and “heavy” industries. See for a clear study: Oshima H.T. “Economic growth in Monsoon Asia. A comparative survey” - Tokyo: The University of Tokyo Press, 1987

13. Consider, for example the effects on employment creation, foreign exchange earnings or GDP growth.

14. After 1985, also an increasing number of small and medium enterprises from Japan and the NIEs started to invest in the ASEAN4 countries, especially in Malaysia and Thailand.