UC Riverside

This chapter provides a new perspective on a longstanding debate concerning the development of contemporary capitalism: does globalization erode the influence of territorial institutions on economic organization? While the theory of institutional comparative advantage and the varieties of capitalism (VoC) approach more generally maintain that globalization is compatible with persistent institutional diversity, the global commodity/value chain (GCC/GVC) approach holds that the organization of production increasingly reflects governance logics that are industry specific and global in scope. In order to empirically evaluate these contending claims, This chapter first derives two sets of divergent hypotheses regarding the degree to which a particular dimension of economic organization-spatial fragmentation-varies by either institutional or industry type, and then conducts a longitudinal statistical analysis in which thi chapter compares rates of spatial fragmentation (measured as the ratio of imports to domestic value-added) across industries and varieties of capitalism. The results provide strong (but imperfect) evidence in support of the GCC/GVC approach insofar as relative rates of spatial fragmentation vary across industries in a manner consistent with industry-specific global governance models, while the observed variation between institutional types is not significantly larger than that within them. The chapter interprets these findings as evidence for the claim that, across different institutional contexts, firms in the manufacturing sector are participating in coordinated trade networks of the sort described in the global commodity/value chains literature. The conclusion charts a parallel path forward in calling for future research that draws on both the VoC and GCC/GVC approaches to understand how spatial fragmentation is occurring, especially at the level of inter-firm relations in particular institutional contexts.