Drivers of Globalization: An Evolutionary Perspective on Firm-State Relations in the Asian Newly Industrialized Economies

The emergence of firms from the Asian Newly Industrialized Economies (NIEs) in the global economy during the past two decades has been phenomenal. Many pundits have attributed the competitive success of these Asian NIE firms and their home economies to the relentless efforts of the so-called developmental states. They argue that state initiatives such as active industrial policy and financial support have enabled these "national champions" to venture into and compete successfully in the global economy. This statist approach to the globalization of Asian firms and their home economies, however, has unfortunately ignored the complex and dynamic evolutionary nature of firm-state relations within the changing context of economic globalization. Drawing upon an institutional and evolutionary theory of change and adjustments, I aim to explain how the global emergence of Asian firms cannot be simply read off from and explained by their embeddedness in the developmental state. Since the 1990s, these Asian firms have strategically disembedded from state apparatus and successfully reembedded themselves in dynamic global production networks. This shift of strategic partnership of Asian firms from firm-state to firm-firm networks has profound implications for our understanding of the present and future trajectories of regional economies in Asia. It presages the demise of the developmental state as the primary driver of economic change and growth in Asian economies. In developing my conceptualization of changing firm-state relations, this paper draws upon several emerging and interrelated research frontiers in economic geography that call for more theoretical attention to trans-local actors and processes, evolutionary dynamics of change, and institutional contexts.