The transfer of consumer goods from Japan started during the second half of the 1960s and was initially concentrated to serve the internal markets of the recipient countries. It followed the import-substitution strategy, initially introduced by the NIEs and lately adopted also by the ASEAN4 countries.

Since the mid-1970s, the Japanese MNEs moved to the creation of export bases in Asia for mass-production and labor-intensive consumer goods to be destined to the markets of the western countries. They followed the strategy of export-expansion introduced by local governments, although the motive of serving the internal markets still remained an important reason for production relocation in this sub-sector.

After 1985, the intensification of FDI flows from Japan and the NIEs $ ^{14} $ helped the process of industrial transfer to further accelerate. For many consumer goods the technology has become quite standardized and much accessible to the late starting countries. However, while South Korean and Taiwanese companies are undertaking autonomous efforts for product and process development, ASEAN4 countries are much more dependent on technology transferred from abroad and seriously lack of efficient indigenous firms. Local authorities usually did not require local sourcing of parts and components and only rarely asked for equity sharing with domestic joint-venture partners. The result was a very limited creation effect of backward linkages.

## I ndustrial equipments

The process of industrial relocation in the sub-sector of industrial equipment goods is occurring at a slower pace than in the other two. Here, technology is more sophisticated and its speed of change is much faster. Among Asian countries, only Japan is able to reach the levels of international competition. Companies require heavy investments in R&D activities as well as the support of a highly upgraded industrial structure $ ^{15} $ . These characteristics, however, are only partially present in the NIEs and are still in their infancy in the ASEAN4 countries. Moreover, the development of this sector often depends on the formation of public demand, especially for the telecommunications industry.

The typical case of industrial relocation is the manufacture of low sophistication products (like telephones, etc.) but in the recent years, also some assembly operations of computer peripherals (disk-drives, keyboards) have started to be relocated. Furthermore, Japanese companies are engaged in supplying telecommunication equipment to several national authorities of Asian countries, which usually request equity sharing with public owned companies. In the recent years, the markets of the computer and the telecommunication industries are moving towards a convergence both from the supply (components and systems) and the demand sides (utilisers). Consequently, a great deal of strategic alliances, takeovers, mergers and acquisitions is occurring between American, Japanese and European companies, in order to increase the level of international competition and capture shares in the new markets.

## Electronic Parts : Microelectronics

The initial wave of FDI in semiconductors towards Asian countries, started in the late 1960s, first to Singapore and immediately later to Malaysia $ ^{16} $ . The first investors were