Angela Garcia Calvo (Collegio Carlo Alberto)
14 May 2015 @ 14:00
- Past event
“Institutions and upgrading strategies in the global economy: a comparative analysis of Spain and Korea”
This talk presents the preliminary argument of a book that examines the roles of states and large firms in fostering economic upgrading in the context of late industrialising, advanced, but not world-leading economies.
The empirical analysis is based on comparison between Spain and Korea’s strategies for economic transformation between 1985 and 2009. These two countries embody the characteristics of non-leading peripheral economies. They industrialised in the 1960s-1970s under the shadow of their more advanced neighbours and they excel in some industries but still lag behind the world’s top economic performers in overall measures such as GDP per capita and well-being indicators. Moreover, Spain and Korea’s economic transformations since the late-1980s exemplify the impact of globalisation on non-leading economies: the combination of new technologies, trade liberalisation, and emerging rivalry from former communist countries in Europe and Asia intensified competition in the standard manufactured outputs and low value-added services that Spain and Korea specialised in, leaving them little alternative but to upgrade. Despite these similarities, Spain and Korea’s upgrading strategies in response to globalisation were quite different. Spain favoured upgrading in complex service sectors such as banking and telecommunication services to the detriment of manufacturing whereas Korea moved upwards within pre-existing manufacturing sectors but its service sectors have remained underdeveloped and underperforming.
This talk asks what historical and institutional factors shaped Spain and Korea’s strategic choices and presents a preliminary argument to answer this question. I contend that transformation in Spain and Korea relied on three common features: proactive states that provided focus and direction for transformation, coherent state structures able to withstand pressure from firms and prevent capture, and symbiotic or co-dependent state-firm relationships. Despite these commonalities, I argue that state-firm coordination in Spain and Korea presented critical differences that shaped each country’s preferences for upgrading strategies. These differences stemmed from historically embedded dissimilarities in the capabilities and resources of each actor that affected the negotiation processes through which national institutions developed and consolidated. Specifically, my analysis explores variations in capacities along three dimensions: financial resources, long-term strategic planning and cross-sector dialogue.