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Copyright © Cambridge Political Economy Society

research-article

Causes of growth: a study of Taiwan's bicycle industry

Wan-wen Chu*

*Academia Sinica Taipei, Taiwan

Abstract

This paper looks at the history of Taiwan's bicycle and parts industries and examines the lessons that can be learned from it. The initial impetus for the big change came in the form of large OEM orders from the American importers, which was prompted by the sudden US demand surge in 1971–74. Taiwan outcompeted other places, because its industry was able to respond quickly in terms of production capability and entrepreneurship. This was as a result of accumulated learning under import-substitution, and from the favourable factors on the overall and industry level in Taiwan. Conditions in Taiwan fostered the emergence of numerous SMEs, which helped the development of a parts suppliers' network. All three factors—accumulated learning, a favourable environment, and globalisation of production—were necessary conditions for the growth of Taiwan's bicycle industry.

Manuscript received December 18, 1992; final version received April 10, 1995.


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