The Political Participation of Firms in Southeast Asia
January 27, 2023
Singapore first hosted the Association for Southeast Asian Nations (ASEAN) Summit from 27th January to 29th January 1992. ASEAN is an economic union that comprises ten member states in Southeast Asia. The union aims to promote intergovernmental cooperation, facilitate socio-cultural exchanges, and enhance economic integration. During the 1992 summit, ASEAN leaders agreed on a framework that promoted economic cooperation within the region. This was one of several milestones that paved the way for the establishment of the ASEAN Economic Community (AEC) in 2015.
In their Ministry of Education Academic Research Fund Tier 2 project, ‘The Political Participation of Firms in Southeast Asia’, funded from 2021 to 2024, Associate Professor Kim Soo Yeon (NUS Political Science) and her research team assert that the AEC will take center stage as regional economic blocs increase in importance. Regional integration spells new problems for both firms and the state. Firms doing business in ASEAN countries will have to develop strategies to respond to both domestic politics and the international environment. On the other hand, ASEAN policymakers will have to develop policy that strikes a balance between competing interests such as supporting economic growth in the region, resolving disputes, and managing the political behavior of firms.
A/P Kim and her research team study the political behavior of domestic and multinational firms with a special focus on the effects of economic integration in the AEC, the effects of global production networks on international trade agreements, and the role of social ties — a key factor in the political and business environment in Southeast Asia —shaping firm capabilities and strategies.
As A/P Kim points out, there is a lack of data for the team to determine patterns of the political behavior of domestic and multinational firms. The research team plans to conduct an extensive survey and data collection efforts from two key stakeholders in the AEC. The survey will collect responses from firms across seven countries and experts from the United Nations Economic and Social Council of the Asia Pacific. This allows the research team to compare different perspectives of ASEAN integration.
The survey will focus on questions related to economic integration and will provide insight into less observable patterns of the political behavior of firms. A/P Kim asserts that these patterns of behavior could exert a greater amount of influence in the political and business environment. As a result, A/P Kim proposes that greater focus should be accorded to these areas to determine and assess the political strategies and behavior of firms.
The project seeks to enhance the competitiveness of Singaporean firms and inform Singapore’s policymaking in the AEC. Firstly, it will boost Singaporean firms’ competitiveness by developing an understanding of the firms’ position in the market. The researchers aim to identify the competitive advantages, liabilities, and areas for development of Singaporean firms relative to their international competitors. This analysis will help firms identify capabilities they need to develop in order to internationalize and enhance their competitiveness.
Secondly, the project will improve our understanding of patterns and causes of firm behavior. These insights can be utilized to inform Singapore’s policymaking decisions for the AEC. A/P Kim postulates that Singapore’s policy leadership will be better equipped to support its internationalizing firms. On the home front, a better understanding of firm behavior will assist the government in managing firms that seek to influence Singapore’s domestic policy to further their own commercial interests.