Industrial policies of countries with abundant natural resources in the Association of Southeast Asian Nations and Pacific Alliance

Abstract

This study evaluates the industrial policy geared toward generating added value in natural-resource-rich countries in the Association of Southeast Asian Nations (ASEAN) and the Pacific Alliance (PA). Using the international input-output tables published by the OECD (2018), we identify the position of each country-sector in global value chains (GVCs) that make intensive use of minerals, and we estimate, through the generalized method of moments, what factors have favored to a greater extent the generation of added value in the sectors that transform minerals, between 2005 and 2015. Horizontal industrial policies are found to have the greatest effect in PA economies because they are located in the initial links of GVCs, while vertical policies have favored industrial upgrading in ASEAN countries due to their prolonged sustainability.