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Governing the market in a globalizing era: Developmental states, global production networks and inter-firm dynamics in East Asia

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  • Henry Wai-chung Yeung

Abstract

This paper focuses on the changing governance of economic development in a globalizing era in relation to the dynamics of global value chains and global production networks. Based on recent development in such East Asian economies as South Korea, Taiwan and Singapore, I examine how, since the 1990s, the embedded relation between one variant of state institutions, known as the developmental state, and national firms, well integrated into global chains and networks spanning different territories and regions, has evolved. Because of the deepening strategic coupling of these national firms with lead firms in global industries, the developmental state's attempt to govern the market and to steer industrial transformation through direct policy interventions has become increasingly difficult and problematic. Through this process of strategic coupling, national firms have been gradually disembedded from state apparatuses and re-embedded in different global production networks that are governed by competitive inter-firm dynamics. While the state in these East Asian economies has actively repositioned its role in this changing governance, it can no longer be conceived as the dominant actor in steering domestic firms and industrial transformation. The developmental trajectory of these national economies becomes equally, if not more, dependent on the successful articulation of their domestic firms in global production networks spearheaded by lead firms. In short, inter-firm dynamics in global production networks tend to trump state-led initiatives as one of the most critical conditions for economic development. This paper theorizes further this significant role of global value chains and global production networks in the changing international political economy of development.

Suggested Citation

  • Henry Wai-chung Yeung, 2014. "Governing the market in a globalizing era: Developmental states, global production networks and inter-firm dynamics in East Asia," Review of International Political Economy, Taylor & Francis Journals, vol. 21(1), pages 70-101, February.
    • Handle: RePEc:taf:rripxx:v:21:y:2014:i:1:p:70-101
    DOI: 10.1080/09692290.2012.756415
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    References listed on IDEAS

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    1. Michael Hobday, 1995. "Innovation In East Asia," Books, Edward Elgar Publishing, number 226.
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    2. Mann, Laura & Kleibert, Jana Maria, 2020. "Capturing value amidst constant global restructuring? Information technology enabled services in India, the Philippines and Kenya," LSE Research Online Documents on Economics 103356, London School of Economics and Political Science, LSE Library.
    3. Robert H. Wade, 2018. "The Developmental State: Dead or Alive?," Development and Change, International Institute of Social Studies, vol. 49(2), pages 518-546, March.
    4. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    5. Hamilton-Hart, Natasha & Stringer, Christina, 2016. "Upgrading and exploitation in the fishing industry: Contributions of value chain analysis," Marine Policy, Elsevier, vol. 63(C), pages 166-171.
    6. Mai, Nhat Chi, 2022. "Reexamining Frontier Markets," OSF Preprints ubfe6, Center for Open Science.
    7. Jana M. Kleibert & Laura Mann, 2020. "Capturing Value amidst Constant Global Restructuring? Information-Technology-Enabled Services in India, the Philippines and Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 1057-1079, September.
    8. Alexander Dodge, 2020. "The Singaporean natural gas hub: reassembling global production networks and markets in Asia [Powerful assemblages?]," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1241-1262.
    9. Mai, Nhat Chi, 2022. "Intervening in market formation," OSF Preprints r5twd, Center for Open Science.
    10. Kleibert, Jana M. & Mann, Laura, 2020. "Capturing Value amidst Constant Global Restructuring? Information-Technology-Enabled Services in India, the Philippines and Kenya," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(4), pages 1057-1079.
    11. Henry Wai-chung Yeung, 2021. "The trouble with global production networks," Environment and Planning A, , vol. 53(2), pages 428-438, March.
    12. Kirsten Martinus & Thomas Sigler & Iacopo Iacopini & Ben Derudder, 2019. "The role of tax havens and offshore financial centers in Asia-Pacific networks: evidence from firm-subsidiary connections," Asian Business & Management, Palgrave Macmillan, vol. 18(5), pages 389-411, November.
    13. Jana M. Kleibert & Laura Mann, 0. "Capturing Value amidst Constant Global Restructuring? Information-Technology-Enabled Services in India, the Philippines and Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-23.
    14. Mai, Nhat Chi, 2022. "Market Formation In Tbong Khmum," OSF Preprints jg5qz, Center for Open Science.
    15. Wade, Robert H., 2018. "The developmental state: dead or alive?," LSE Research Online Documents on Economics 87356, London School of Economics and Political Science, LSE Library.
    16. Zhuang, Liang & Ye, Chao, 2020. "Changing imbalance: Spatial production of national high-tech industrial development zones in China (1988-2018)," Land Use Policy, Elsevier, vol. 94(C).
    17. Kelecha, Mebratu, 2022. "A critique of building a developmental state in the EPRDF's Ethiopia," LSE Research Online Documents on Economics 115567, London School of Economics and Political Science, LSE Library.
    18. Pauline Debanes, 2018. "Modes of Insertion into Global Value Chains as a Source of Firms' Heterogeneity?," Working Papers halshs-01849224, HAL.
    19. Danny MacKinnon & Stuart Dawley & Markus Steen & Max-Peter Menzel & Asbjørn Karlsen & Pascal Sommer & Gard Hopsdal Hansen & Håkon Endresen Normann, 2018. "Path creation, global production networks and regional development: a comparative international analysis of the offshore wind sector," Papers in Evolutionary Economic Geography (PEEG) 1810, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2018.
    20. Henry Wai-chung, 2023. "From Regional to Global and Back Again? A Future Agenda for Regional Evolution and (De)Globalized Production Networks in Regional Studies," Papers in Evolutionary Economic Geography (PEEG) 2312, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2023.
    21. Henry Wai-chung Yeung, 2015. "Regional development in the global economy: A dynamic perspective of strategic coupling in global production networks," Regional Science Policy & Practice, Wiley Blackwell, vol. 7(1), pages 1-23, March.
    22. Henry Wai-chung Yeung & Neil M. Coe, 2015. "Toward a Dynamic Theory of Global Production Networks," Economic Geography, Clark University, vol. 91(1), pages 29-58, January.

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