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Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework

Boschma, Ron LU and Capone, Gianluca (2015) In Research Policy 44(10). p.1902-1914
Abstract
The varieties of capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products... (More)
The varieties of capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies, while liberal market economies show a higher probability to move in more unrelated industries: their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution. In particular, we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on 'non-market' coordination in the domains of labor relations, corporate governance relations, product market relations, and inter-firm relations. (C) 2015 Elsevier B.V. All rights reserved. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Evolutionary economic geography, Diversification, Relatedness, Institutions, Varieties of capitalism
in
Research Policy
volume
44
issue
10
pages
1902 - 1914
publisher
Elsevier
external identifiers
  • wos:000364620700009
  • scopus:84945305091
ISSN
0048-7333
DOI
10.1016/j.respol.2015.06.013
language
English
LU publication?
yes
id
9f6ddbda-2df0-42c5-8127-0dd61b048fe1 (old id 8377503)
date added to LUP
2015-12-18 12:49:31
date last changed
2017-10-08 03:51:06
@article{9f6ddbda-2df0-42c5-8127-0dd61b048fe1,
  abstract     = {The varieties of capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies, while liberal market economies show a higher probability to move in more unrelated industries: their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution. In particular, we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on 'non-market' coordination in the domains of labor relations, corporate governance relations, product market relations, and inter-firm relations. (C) 2015 Elsevier B.V. All rights reserved.},
  author       = {Boschma, Ron and Capone, Gianluca},
  issn         = {0048-7333},
  keyword      = {Evolutionary economic geography,Diversification,Relatedness,Institutions,Varieties of capitalism},
  language     = {eng},
  number       = {10},
  pages        = {1902--1914},
  publisher    = {Elsevier},
  series       = {Research Policy},
  title        = {Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework},
  url          = {http://dx.doi.org/10.1016/j.respol.2015.06.013},
  volume       = {44},
  year         = {2015},
}