Industrial Clusters, Upgrading and Innovation in East Asia

Industrial Clusters, Upgrading and Innovation in East Asia

Edited by Akifumi Kuchiki and Masatsugu Tsuji

This lucid and informative book analyzes the problem of clusters in transition through studies of agglomerations at different stages of development in various East Asian countries.

Chapter 4: Export Processing Zones and the WTO SCM Agreement

Motoyoshi Suzuki

Subjects: asian studies, asian economics, asian urban and regional studies, development studies, development economics, economics and finance, asian economics, development economics, economics of innovation, industrial economics, regional economics, innovation and technology, economics of innovation, urban and regional studies, clusters, regional economics


Motoyoshi Suzuki 4.1 INTRODUCTION The origin of the Export Processing Zone (EPZ) can be traced back to Shannon Airport EPZ, established in Ireland in 1959. Following this, many countries have established EPZs as an engine of economic growth. According to Singa Boyenge (2007: 1), the number of EPZs increased dramatically from 79 EPZs in 25 countries in 1975 to 3500 EPZs in 130 countries in 2006 (Table 4.1). The first establishment of an EPZ in developing countries was Kaoshiung EPZ in Taiwan in 1966. The Government of Korea, encouraged by the successful performance of Kaoshiung EPZ, established Masan EPZ in 1970 (Ishida, 2004: 317). Thus, many EPZs were established in countries in East Asia as well as other developing countries in the 1970s and 1980s. EPZs were thought to be an important means of the promotion of foreign direct investment (FDI) inflow, job creation, expansion of exports, and so on, by the governments. China has been by far the major country involved in the expansion of EPZ activity. Today there are over 90 EPZs in Sub-Saharan Africa and in the transition economies of Eastern and Central Europe, including those accounting for a significant share of country exports in Gabon, Ghana, Kenya, Lesotho, Mali, Mozambique, Nigeria, Zimbabwe, the Czech Republic, and Lithuania (Singa Boyenge, 2007: 2) (Table 4.2). Table 4.1 Years Number of countries with EPZs Number of EPZs or similar types of zones Source: Singa Boyenge (2007: 1). Estimates of the development of Export Processing Zones 1975 25 79 1986...

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