The 175th meeting jointly organized with International Public Policy Seminar
Date Friday, April 17, 2026 13:30 to 15:00
Place Only in-person at Conference Room, 6th floor, Osaka School of International Public Policy Building, Toyonaka Campus.
http://www.osipp.osaka-u.ac.jp/en/about-osipp/where-we-are/
Presenter Tomohiro Machikita, Center for Southeast Asian Studies, Kyoto University.
Title: “Do Deepening Suppliers Diversify? The Motorcycle Industries in Indonesia and Vietnam” (joint with Mai Fujita and Yuri Sato).
Abstract: For developing countries seeking to gain from linking with value chains led by multinational corporations (MNCs), building suppliers of intermediate inputs is crucial. Notably, entry into such chains requires investments for responding to MNCs' requirements. Despite the abundance of literature on upgrading of suppliers, little is known about the effects of such investments on suppliers' sustained growth. This paper examines whether suppliers can achieve sustained growth- as defined by firm-level profitability and the acquisition of new customers- by applying process upgrading cultivated in value chains led by MNCs. We use original survey data based on interviews of motorcycle component suppliers in Indonesia and Vietnam, which enables us to propose a new measure of process upgrading. We find that transferability of capability for process upgrading can help provide outside options in terms of acquiring new customers. While our empirical findings and evidences from qualitative case studies partially support the conventional theory that argues relation-specific investment locks suppliers into the current transactions, this study presents a new view that redeployment of suppliers' process upgrading for customers outside the existing industry, which reduces dependence on the dominant customers, is a practicable path of their sustained growth.