Recently, the paper titled 'Institutional Divergence and Technological Upgrading in Southeast Asia: A Firm-Level Comparison of the ICT Sectors in Indonesia and Vietnam,' co-authored by Professor Yu Miaojie, President of Liaoning University, and Professor Tariq H. Malik, Chief Economist of the Center for New Structural Economics at Liaoning University, has been officially accepted for publication in the internationally renowned journal Journal of Asian Economics.
Abstract
This paper focuses on an important phenomenon in the upgrading of the ICT sector in Southeast Asia: why have Indonesia and Vietnam, both members of ASEAN and facing similar global competitive pressures, followed different technological upgrading paths? Taking institutional divergence as the entry point, the paper draws on microdata of over 19,800 ICT firms from the Moody’s Analytics Orbis database covering the period 1970–2024. It compares the ICT sectors of the two countries across multiple dimensions, including firm age, size, profitability, product portfolio breadth, technological complexity, technological distance, and value chain position. The study finds that Indonesian ICT firms are more mature—older and larger—and exhibit higher short-term profitability. However, they have lower technological complexity, narrower product portfolios, and are more concentrated in the domestic market and downstream segments of the value chain. In contrast, Vietnamese ICT firms, though younger, smaller, and with limited short-term profitability, demonstrate higher technological complexity, broader product portfolios, as well as stronger manufacturing orientation and global value chain embeddedness. These differences stem from diverging industrial upgrading outcomes under the two institutional environments: Indonesia may suffer from a certain degree of institutional rigidity, where policy inertia, regulatory friction, and protective incentives weaken firms' incentives for experimentation, competition, and upgrading; Vietnam, meanwhile, exhibits a more adaptive institutional environment that facilitates firm-level capability accumulation and global market participation. Thus, the paper reveals a key trade-off in ICT upgrading in developing countries: short-term profitability does not necessarily imply long-term technological deepening, nor does industrial expansion equate to capability upgrading.
Journal Introduction
The Journal of Asian Economics was founded in 1990 by the American Committee on Asian Economic Studies (ACAES). It is a Q1 journal in the JCR ranking and a Category 2 journal in the Chinese Academy of Sciences' economics ranking.
Authors Profile
Yu Miaojie is the Deputy Secretary of the Party Committee and President of Liaoning University. He is a Lifetime Fellow of the Royal Economic Society (FREcon), a Fellow of the International Economic Association (IEA), a Changjiang Scholar Distinguished Professor, and a recipient of the National Science Fund for Distinguished Young Scholars. He serves as a Deputy to the 14th National People's Congress (NPC) and as a Special Supervisor of the National Commission of Supervision. He is an Associate Editor of The Economic Journal, a top international journal in economics. He is among the top 1% most cited economists in global economics and management fields, and is the only Chinese scholar to date to have received the Royal Economic Society Prize. He is the Editor-in-Chief of China's Open Economy, a key original textbook in philosophy and social sciences in China, and a recipient of the Special Government Allowance of the State Council.
Tariq H. Malik is a Professor and holds a Ph.D. in Management from the University of London, UK. He serves as Chief Economist of the Center for New Structural Economics at Liaoning University and Director of the International Center for Organization and Innovation Studies (ICOIS) at the Business School of Liaoning University. His research primarily focuses on innovation and technology policy in the fields of organization and management. He has published articles in journals such as Research Policy and International Business Review. He was a Visiting Scholar at the University of London (2011–2013) and a Visiting Scholar at King's College London (2012–2014). He serves as an anonymous reviewer for journals including the Academy of Management Journal, International Business Review, and R&D Management.
