Changing Trade Structure and Industrial Deepening in the Thai Economy

Abstract

Industrial development is increasing in complexity by economic inter-dependence within an economy. Between 1975 and 2010, Thailand’s industrial deepening was evidenced by an increase in average aggregate linkages. Backward linkages for manufacturing sectors is found to be above the agricultural and primary sectors as well as service sectors. Backward linkage improvement in the agricultural and primary sectors is matched by forward linkage improvement in the service sectors. Through the growth of intra-industry trade of the global supply chain, structural change is driven by the strong growth of manufacturing sectors, relative to the agricultural and primary sectors as well as the service sectors. Stationary backward and forward linkages in manufacturing sectors indicate constant reliance on imports and equally on the agricultural, primary and service sectors for input requirements and a strong reliance on export market for growth.