Geography Reference
In-Depth Information
Economic-structural impact factors
1. A marked industrial mono-structure: the leading industry having an employment
share of at least 30 per cent of the total manufacturing employment in the region as
a rough indicator for a mono-structure.
2. A specii c leading industry: capital-intensive, high entry and exit barriers, above
average company size, oligopolistic market structure, and inl uential trade unions.
Political-institutional impact factors
3. An institutional tissue at the regional level, consisting of local, regional policy-
makers, captains of industry, regional trade unionists, representatives of industry
associations, that is strongly focused on the leading industry and hence weakly on
external relations.
4.
A national-political system, which enables regional actors to inl uence political ques-
tions concerning industrial policy.
5.
Supra-national institutions that strongly af ect the conditions of industrial policy
relevant to the leading industry.
The following empirical section analyses whether regional lock-ins hinder the renewal
of the textile and shipbuilding industry regions in Germany and South Korea. It also
helps to fuli l the second main aim of this chapter, namely to detect the factors af ecting
the strength or weakness of regional lock-ins.
3. Putting the case studies in context
In order to be able to give a fair judgement on the impact of the above described factors
on regional lock-ins, the case studies that are presented in the next section need to be con-
textualized both concerning the economic structure (shipbuilding and textile industries)
and the political-institutional context (Germany and South Korea).
Concerning the
economic- structural context
, the shipbuilding industry is both spatially
extremely concentrated, and at the same time a global industry and an industry with
much state intervention (Cho and Porter, 1986; Stopford, 1997). During the history of
the industry, there have been dramatic changes in global leadership (Cho and Porter,
1986; Stopford, 1997; Todd, 1991). Shortly after the Second World War, Germany and
some other European countries took over leadership from Great Britain. In the 1960s
Japan became the world's leading shipbuilding nation. Since 1973 South Korea has been
building up and expanding its shipbuilding industry and since the end of the 1990s Japan
and South Korea have shared world leadership in shipbuilding (Stopford, 1997). The
industry is characterized by very high exit barriers and high sunk costs. Furthermore, in
some countries the industry is strongly supported by the state because many shipyards
are located in coastal areas with few alternative employment opportunities (Stopford,
1997, p. 468). 'These [exit] barriers lead unsuccessful shipbuilders to continue operating,
often with government subsidies, and to persistently wage price wars at the expense of
industry proi tability' (Cho and Porter, 1986, pp. 543-4). Despite high entry barriers,
strong government support has facilitated several countries, such as Japan and South
Korea, to enter the market, whereas governments in Western Europe heavily intervened
