Best practice? Geography, learning and the institutional limits to strong convergence

According to many, we live in an age in which convergence between formerly distinct national `models' is taking place. Central to this process is a learning dynamic in which best practices originating from within one model-Japan in the 1980s, United States in the 1990s-are supposedly adopted by firms elsewhere. This paper addresses two key questions concerning this process. First, what are the actual mechanisms or processes through which this learning-driven convergence might occur? Second, what role do institutions play in shaping, influencing, or constraining firms' choice of practices and their ability to `learn'? The paper examines eight specific channels of convergence representing a continuum of opportunities for learning-through-interacting. It then assesses critically a range of competing arguments about the role of institutional influences at three different scales: the region, the nation-state, and the firm. It concludes that while regional and firm-level arguments, on their own, do not provide an adequate explanatory framework for understanding how firms' practices are determined, national level theory needs to be made supple enough to accommodate a significant role for regional institutions and the agency of the firm. Copyright 2001 by Oxford University Press.