hand, the “CPC” theory assumes that the “actors” are the developing countries and the principal “mechanism” is international trade $ ^{3} $ . In the second case (CPC), a typical “catching-up” sequence in the growth of imports-production-exports will take place. This is based on the activity of local entrepreneurs which direct the industrialization process first by substituting imports with internal production and then by expanding their export markets. In order to achieve the CPC-type development, however, the technology should be standardized and attainable by the local developing firms. Actually, this is a time-spending process for learning-by-doing and managerial resources’ accumulation. FDI can play an important role in fostering the catching-up industrialization, but at the initial stage capitals are drawn from domestic sources. This makes a clear distinction with the PC model, which affirms instead that since the beginning the industrial transfer will occur by means of FDI flows.

Finally, the two theories have different implications in terms of strategies for industrial policy. The CPC model clearly suggests that the most suitable policy will promote import-substitution at the initial stage and later export-expansion. On the other side, the PC model apparently does not support any particular strategy, but in reality it implies a policy allowing the industry to start directly with EE. In fact, to the extent that for the developing country the industry is an innovative one, it will be unlikely to have a very well developed internal market for consumption and industrial goods, hence transferred firms will more likely produce for export.

#### 2. THE ELECTRONICS INDUSTRY IN THE ASIAN PACIFIC DEVELOPMENT 2.1 Composition and Characteristics Composition

The electronics industry covers a very wide range of operations which require a different use of factors of production, level of technological knowledge and size of firms. Due to the complexity of the production process, a quantitative analysis of the electronics industry presents several problems of homogeneity for international comparisons and consistency with the classifications adopted domestically.

Firstly, international statistics are collected as follows $ ^{4} $ : a) on production, under the International Standard Industrial Classification (ISIC) item 383 (Electrical Machinery) and more in particular under item 3832 (Electronics Equipment); b) on trade, under the Standard International Trade Classification (SITC) (revision 3) under item 7 (Machinery and Transport Equipment) and more in particular under items 76 (Telecommunication and sound reproducing apparatus and equipment) and 77 (Electrical Machinery).

Secondly, individual countries generally collect internal data according to a functional classification into three sub-sectors: 1) Consumer electronic goods, 2) Industrial equipment goods, 3) Electronic active parts and components. With regard to Japan, in 1990 the EIAJ (electronics industry Association of Japan) identified a total of 250 product categories: 30 in consumer goods, 128 in industrial equipments and 92 in electronic parts.

Figure 2.1 shows the composition of Japanese electrical and electronics industry, including each sub-sector's main products. A more proper analysis of the industrial structure, accounting for the differences from the supply and demand sides in terms of : a) relative intensity of factors of production ; b) market structure ; c) speed of technological change and