Industrial Upgrading in Mixed Market Economies: The Spanish Case

Angela Garcia Calvo

No 3, Europe in Question Discussion Paper Series of the London School of Economics (LEQs) from London School of Economics / European Institute

Abstract: This paper discusses convergence through the concept of industrial upgrading and its application to the Spanish case. The paper explains the recent rise of Spain’s firms in high value-added service sectors and the fall in capital and skill-intensive manufacturing through the characterisation of Spain’s institutional structure. I argue that Spain’s institutional system is defined by peer coordination (PC), a non-hierarchical form of strategic coordination based on the presence of public-private interdependencies and direct state-business interactions. Under PC, Spanish firms in complex services sectors enabled the state to achieve developmental goals in exchange for sector-specific advantages that facilitated upgrading. The absence of effective intermediary agents hindered the development of PC in manufacturing sectors dominated by small firms. Furthermore, PC limited their access to the patient capital and stable demand necessary to develop new, complex products. The central state and some regional governments were able to circumvent these limitations only in exceptional cases.

Keywords: industrial policy; Spain (search for similar items in EconPapers)
Date: 2014-03-21
New Economics Papers: this item is included in nep-cse
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Citations: View citations in EconPapers (2)

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