Abstract
State-business relations' (SBR) explanation on the success and failure of industrial upgrading focuses on stakeholder interest, based on the sharing of rents. In this perspective, rent sharing based on mutual interest is a governmental strategy, dependent on its capacity to manage business expectations and shape their behaviour and partnerships for successful industrial upgrading. This state-centric approach is insufficient in explaining the making of an industrial upgrading policy that heavily reflects business interests and strategy. The existing approach does not fully show the mechanism by which the policymaking process occurs, critically missing out how business power comes into play in this rent-management process. Furthermore, the state- centric approach to industrial policymaking does not consider the different types of bargaining power among business actors. SME suppliers are often left out from policymaking and the overall process of upgrading. Even the global value chain and production network literature has not identified how government policies consolidate the different types of bargaining power among firms and contribute to the reproduction of suppliers' technological capture by big lead firms. Hence, a power-based explanation is necessary: mainly how "business power" operates among government policymakers, business elites from big businesses and their suppliers. This thesis poses two questions: firstly, what is the mechanism that mutual interest in industrial policy emerges from strategies of big businesses, and secondly, does this render a positive (success) or negative (failure) outcome for industrial upgrading?The research conducted an in-depth case study of the green car policy in South Korea to illustrate SBR and interfirm relationships in the country's manufacturing industry (focusing on automotive and electronics sectors). Korea's auto industry, which has grown on the benefits of a developing country, is now touted as the driving force behind the green economy, encompassing two major industries, automobiles and electronics. Having explored green industrial policy in South Korea, this thesis argues that firstly, an industrial upgrading policy reflects business power, especially "structural power" in the form of "information power", which enables business elites to form a business-dominant industrial policy coalition. Secondly, this renders a negative outcome for industrial upgrading by deepening suppliers' technological capture by big business groups before and after the given policy.
The findings contribute to SBR literature by unpacking the causal mechanisms of how business power shapes industrial upgrading policy. It elucidates how structural power in the form of information power emerges at the expense of technological capture and influences industrial policymaking at a critical stage of agenda setting. Doing so, the research advances the power- based approach to SBR and their mutual interest in the process of industrial development. Also, the thesis sheds light on the reproduction of technological capture of SME suppliers in South Korea because of the big business-oriented upgrading policy.
| Date of Award | 1 May 2022 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Nahee Kang (Supervisor) & Robyn Klingler-Vidra (Supervisor) |