State-firm coordination and upgrading in Spain's and Korea's ICT industries

Angela Garcia Calvo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Generating sustainable growth and reaching advanced economy status depend on the ability of countries to host local, globally competitive firms in skill-, capital-, and knowledge-intensive industries. However, few countries succeed. This paper asks whether state activism is necessary to foster economic transformation at high levels of complexity in the globalisation era, and if so, what strategies are effective. Using evidence from Spain's and Korea's ICT industries since the 1980s, the paper argues that state-firm coordination remains necessary to reach the efficiency frontier in complex industries. However, coordination has shifted from hierarchical structures to nonhierarchical models in which states and firms develop mutually agreed-upon working rules to reach beneficial outcomes. Nonhierarchical coordination may involve adopting different institutional configurations, depending on the identities and capabilities of firms and national governments and on the nature of linkages with other nations. These linkages may lead to alternative pathways to upgrading and diverse productive specialisations.

Keywords: business-government relationships; industrial upgrading; late development; Political economy; state activism (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2021-01-02
New Economics Papers: this item is included in nep-ict, nep-isf and nep-tid
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Published in New Political Economy, 2, January, 2021, 26(1), pp. 119 - 137. ISSN: 1356-3467

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103929

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