The politics of industrial restructuring: A comparison of the auto industry in South Korea and Mexico

The main purpose of this study is to explore the processes and consequences of the internationalization of the economies of the newly industrializing countries (NICs), comparing the auto industries in South Korea and Mexico. While the two auto industries have been rapidly transformed as dynamic export sectors since the late 1970s, they have exhibited two contrasting development paths: an independent path in Korea and a TNC-reliant path in Mexico.; Two main questions are addressed. The first question concerns the determinants of the contrasting internationalization paths in the two industries. The three main variables are hypothesized to be the most important: the strategies of global firms, state structure and state policies, and the organization and strategies of the local private sector. A main finding is that while the changing strategies of global firms and state policies triggered the transition to an export strategy, the organization and strategies of the private sector was the most crucial determinant of the different internationalization paths.; The second question is how the internationalization of the industry changes state-business and capital-labor relations. Two main findings emerged. First, the relative autonomy and power of the state vis-a-vis business has declined as a result of the internationalization in the two industries. In addition, the role of the state has changed from one of proactive "leadership" to a passive "followship" role. Second, while internationalization has changed capital-labor relations in both cases, the direction of change differed. In Mexico, the status and wages of auto workers declined significantly, while the Korean auto workers increased their wages and status during the same period.; At the theoretical level, it is argued that the institutional approach provides a better explanatory framework than competing theoretical explanations including the neo-classical and the structural approaches. Within the institutional approach, I argue that a broad institutional analysis, which focuses on the state-business nexus, should replace a narrow and often static state-centered analysis. A special theoretical emphasis is given on the organization and strategy of business as a key economic institution.