Chapter 5 Internationalization and Industrialization

Abstract

Much has been written about the low-wage rates in the pre-industrialized Asian economies. True, in several of those economies in Asia, supply of labor, unskilled as well as skilled, was relatively abundant. Most of these economies enjoy large population bases. The migration of labor from the agricultural sector within a given economy, when the economy's industrial population base was not large enough, helped augment the process of industrialization. However, a more intensive analysis of investment theory teaches us that the cost of labor, wages, and borrowing funds for investment, be it from financial institutions or from individual sources, the rate of interest, are known cost factors to the investors. The principal motivating factor is the expected profit, which remains unknown to the investors, and becomes the subject of speculation. The expected profit factor thus remains to be defined.

Citation

Dutta, M. (2009), "Chapter 5 Internationalization and Industrialization", Dutta, M. (Ed.) The Asian Economy and Asian Money (Contributions to Economic Analysis, Vol. 287), Emerald Group Publishing Limited, Leeds, pp. 191-228. https://doi.org/10.1108/S0573-8555(2009)0000287009