Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303356 
Year of Publication: 
2014
Series/Report no.: 
LEQS Paper No. 73
Publisher: 
London School of Economics and Political Science (LSE), European Institute, London
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.
Subjects: 
convergence
business and public policy
models of capitalism
production systems
Spain
Document Type: 
Working Paper

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