tion relocation to be accompanied by a strategy of export expansion. However, if one also intend to draw implications for the recipient country's development process, the PC model is not able to clarify the industry's role and its growth potential.

In contrast, when the process is conducted by the initiative of local entrepreneurs and the production is more standardized, the pattern of industrial development transmission may be referred to as one of the CPC-type. Since the strategy followed by the transferring firms is more market oriented, a preliminary phase of output concentration on internal demand (import-substitution) will precede that of export expansion. Accordingly, the main obstacles to the application of this approach are given by the relatively scarce presence of indigenous firms and the high technological content of production. In addition, we remember from section 1 that according to the PC theory the initial mechanism of the industrial relocation process is based on FDI flows, while the CPC theory stresses the role played by trade $ ^{44} $ . Of course, both hypothesis do consider the interactions between investment and trade, but the focus laid on the main agent is basically different.

Finally, we should decide a rule for assigning the process of electronics sub-industry development transmission occurring from Japan to Malaysia as closer to the interpretation offered by the PC or the CPC theory. In principle, both models provide incomplete explanations. The PC is not a proper theory of industrial development. Similarly, since every sub-industry was started on the inflow of foreign capitals and presents a serious lack of indigenous firms, the CPC is not supported by empiric confirmation.

In accordance with these limitations, we propose to adopt the explanation provided by the PC model when the production relocation activity was oriented towards exports since the beginning, without experiencing any previous phase of concentration on the internal market. On the contrary, we will intend the process of industrial development transmission as closer to the CPC explanation when it initially followed the strategy of import substitution (aiming to serve the needs of the domestic demand) and successively shifted to one of export expansion (in order to produce for the international markets).

The most suitable case of PC-type development is that of microelectronics sub-industry. Here, there is no presence of local firms and the main purpose of production relocation is the exploitation of the internal costs advantages in order to reach high levels of competitiveness in international markets (export orientation). Only recently, in response to the upgrading of the industrial structure and the increase of the local demand, some products have been destined to serve the domestic market $ ^{45} $ . Also the manufacture of telecommunication and computer products may be intended, for the same reasons, as closer to the PC explanation. Nonetheless, these sub-industries are underdeveloped and still at their infancy, especially in the case of more sophisticated goods.

On the other hand, the case for CPC industrial development may be illustrated by the sub-industries of electrical and electronics equipment, and that of electronic components. In particular, the first one has already experienced both stages of import-substitution and export-expansion, while the second one is still concentrated on the production for the internal market. As previously observed, however, the application of the CPC approach is in conflict with the still very few number of indigenous Malaysian firms. The main problem lies in the strong reliance on foreign companies for industrial development: in the case of electrical and