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Industrial Upgrading in Mixed Market Economies: The Spanish Case

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  • Angela Garcia Calvo

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.

Suggested Citation

  • Angela Garcia Calvo, 2014. "Industrial Upgrading in Mixed Market Economies: The Spanish Case," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 3, London School of Economics / European Institute.
    • Handle: RePEc:erp:leqsxx:p0073
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    References listed on IDEAS

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    1. Cesar A. Hidalgo, 2009. "The Dynamics of Economic Complexity and the Product Space over a 42 year period," CID Working Papers 189, Center for International Development at Harvard University.
    2. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 165-204.
    3. Pons, Maria A., 1999. "Capture or agreement? Why Spanish banking was regulated under the Franco regime, 1939–751," Financial History Review, Cambridge University Press, vol. 6(1), pages 25-46, April.
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    Cited by:

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    2. -, 2020. "The Caribbean Outlook: Forging a people-centred approach to sustainable development post-COVID-19," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 46192 edited by Eclac, September.

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    industrial policy; Spain;

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