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Upgrading in Spain: An Institutional Perspective

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  • Angela Garcia Calvo

Abstract

This paper frames and summarises the main contributions of a book-length project that aims to explain the recent rise of Spain’s firms in complex service sectors, and the parallel fall in skill- and capital-intensive manufacturing sectors, through an analysis of the institutional structure that enabled it. The paper argues that a form of strategic coordination called peer coordination (PC) was responsible for the Spanish pattern of upgrading. PC was a non-hierarchical variant of strategic coordination based on the presence of structural public-private interdependencies and direct statebusiness interactions. PC enabled large, well-established Spanish firms in complex service sectors like banking and telecommunications to maintain control of the home market and undertake costly restructurations but imposed few constraints on these firms, facilitating upgrading. The lack of effective intermediary agents hindered the development of PC in capital- and skill-intensive manufacturing sectors dominated by small and medium enterprises (SMEs). Furthermore, PC in banking and telecommunications imposed additional constraints in manufacturing sectors like professional electronics, making it difficult for firms to access the patient capital and stable demand they needed to develop new, complex products. In exceptional cases, the central state and some regional governments were able to circumvent the limitations derived from PC and to create institutional structures that supported modest upgrades in some manufacturing sectors.

Suggested Citation

  • Angela Garcia Calvo, 2013. "Upgrading in Spain: An Institutional Perspective," Carlo Alberto Notebooks 329, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:329
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    File URL: https://www.carloalberto.org/wp-content/uploads/2018/11/no.329.pdf
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