Testing theories of regime change: hegemonic decline or surplus capacity?

Two theories explain changes in the international regimes for major economic sectors. A theory of hegemonic stability explains sectoral change as a consequence of ebbing hegemony; a theory of surplus capacity attributes regime shifts to a serious global problem with excess production capacity in the sector. The history of the world automobile industry shows that surplus capacity offers the better prediction and explanation for the timing of regime changes. However, a synthesis of the two theories is even more satisfactory. Hegemonic decline is a necessary but not sufficient condition for change. Surplus capacity, in the absence of a hegemon, creates the conditions necessary for change.