ABSTRACT
The flying-geese (FG) theory of trade and development originated in and has
been applied to Southeast Asia and the Pacific. Its original formulation by
Akamatsu (1935) occurred at a time when Japan itself was a labour-intensive
economy, and when trade was seen as a major mode of technology transfer. At
this time transnational corporations (TNCs) played a limited role. Akamatsu
developed the theory on the basis of experience of the evolution of Japanese
consumer goods industries (e.g. cotton textiles) during the pre-war period. On
the basis of empirical data, he showed a flying-geese pattern of industrial
upgrading (or catch-up industrialization) through the following three stages:
imports, domestic production, and subsequent export of manufactured goods to
the less developed countries.1 This sequential pattern emerged in Japan, thanks
to the exceptionally high savings ratio and effective technological assimilation
and progress. With growing labour shortage a gradual shift took place from
consumer goods to capital goods which assumed the role of a leading sector in
economic development.
