Pub Date : 2022-08-11DOI: 10.1177/10245294221120936
P. Iliopoulos, D. Wójcik
The literature on financialization tends to overemphasize the increasing size of the financial sector vis-á-vis the rest of the non-financial business sector, usually excluding from the analysis the inter-sectoral relationships between firms. Moreover, few studies have utilized the analytical tools of network theory and the notion of centrality, despite the fact that they conceptualize financialization as the rising centrality of the financial sector. This paper attempts to address these issues and explore the evolution of financialization in the US economy before and after the subprime crisis, investigating the changes in the position of the financial sector. Informed by financial geography and the framework of Global Financial Networks (GFN), we also shed light on the impacts of financialization on those advanced business services sectors that complement financial activity, such as accounting, law, business consulting, and other business services firms. Empirically, we estimate backward and forward inter-sectoral linkages, clustering coefficients, and measures of centrality, utilizing a long time-series of input–output tables at a highly disaggregated level, in order to study the inter-sectoral evolution of financialization in the US.
{"title":"The multiple faces of financialization: Financial and business services in the US economy, 1997–2020","authors":"P. Iliopoulos, D. Wójcik","doi":"10.1177/10245294221120936","DOIUrl":"https://doi.org/10.1177/10245294221120936","url":null,"abstract":"The literature on financialization tends to overemphasize the increasing size of the financial sector vis-á-vis the rest of the non-financial business sector, usually excluding from the analysis the inter-sectoral relationships between firms. Moreover, few studies have utilized the analytical tools of network theory and the notion of centrality, despite the fact that they conceptualize financialization as the rising centrality of the financial sector. This paper attempts to address these issues and explore the evolution of financialization in the US economy before and after the subprime crisis, investigating the changes in the position of the financial sector. Informed by financial geography and the framework of Global Financial Networks (GFN), we also shed light on the impacts of financialization on those advanced business services sectors that complement financial activity, such as accounting, law, business consulting, and other business services firms. Empirically, we estimate backward and forward inter-sectoral linkages, clustering coefficients, and measures of centrality, utilizing a long time-series of input–output tables at a highly disaggregated level, in order to study the inter-sectoral evolution of financialization in the US.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"707 - 728"},"PeriodicalIF":3.9,"publicationDate":"2022-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47600117","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-08DOI: 10.1177/10245294221117275
J. Rabinovich, Rodrigo Pérez Artica
The increase in cash holdings held by non-financial corporations in emerging economies in general, and Latin American in particular, has received less attention vis-à-vis their advanced economies’ peers. Considering that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether the pursuit of financial revenues was one motive behind the decision to hold this type of asset as it is claimed in analyses of corporate financialization. We use a panel of listed non-financial firms from Argentina, Brazil, Chile, Mexico, and Peru between 1998 and 2018 to test this hypothesis. Although we find supporting statistical evidence in favor of this relation, this is mostly explained by Brazil and results point towards a low economic significance.
{"title":"Cash holdings and corporate financialization: Evidence from listed Latin American firms","authors":"J. Rabinovich, Rodrigo Pérez Artica","doi":"10.1177/10245294221117275","DOIUrl":"https://doi.org/10.1177/10245294221117275","url":null,"abstract":"The increase in cash holdings held by non-financial corporations in emerging economies in general, and Latin American in particular, has received less attention vis-à-vis their advanced economies’ peers. Considering that cash holdings contain not only cash but also short-term, interest-bearing assets, we test whether the pursuit of financial revenues was one motive behind the decision to hold this type of asset as it is claimed in analyses of corporate financialization. We use a panel of listed non-financial firms from Argentina, Brazil, Chile, Mexico, and Peru between 1998 and 2018 to test this hypothesis. Although we find supporting statistical evidence in favor of this relation, this is mostly explained by Brazil and results point towards a low economic significance.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"635 - 655"},"PeriodicalIF":3.9,"publicationDate":"2022-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48738973","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Erratum to “Multi-sided platforms and innovation: A competition law perspective”","authors":"","doi":"10.1177/10245294221116736","DOIUrl":"https://doi.org/10.1177/10245294221116736","url":null,"abstract":"Marty F and Warin T (2022) Multi-sided platforms and innovation: A competition law perspective. <i>Competition & Change</i>. DOI: 10.1177/10245294221085639.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"81 1","pages":""},"PeriodicalIF":3.9,"publicationDate":"2022-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138534103","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-07DOI: 10.1177/10245294221107851
Liam Keenan, T. Monteath, D. Wójcik
In recent years the pharmaceutical industry has been accused of prioritising profits from patents at the expense of the wellbeing of patients. Many argue that this transition reflects the full-scale financialization of the industry, whereby an increasing focus on shareholder value and financial performance has resulted in cost-cutting, outsourcing and novel forms of competition based on securing new patents and intellectual property rights through mergers and acquisitions (M&As). The aim of this article is to explore the variegated financialization of the pharmaceutical industry through the analysis of M&A data. Acknowledging M&As as a key tenet of pharmaceutical financialization and drawing from a sample of 1805 deals between 2001–2020, we reveal an uneven geography of acquirers and targets across the global, national and city scales. While we uncover a global rise in the value and volume of M&A deals, this activity is concentrated across a limited geography, with the US the largest market by value and China the largest by volume. Analysing these two countries in depth reveals the importance of institutional and regulatory conditions in not only shaping the implementation of M&As but fundamentally constituting the nature, causes and effects of financialization. These findings allow us to develop a relational conceptualisation of financialization which adds novelty to geographical debates around its uneven causes, processes and outcomes.
{"title":"Patents over patients? Exploring the variegated financialization of the pharmaceuticals industry through mergers and acquisitions","authors":"Liam Keenan, T. Monteath, D. Wójcik","doi":"10.1177/10245294221107851","DOIUrl":"https://doi.org/10.1177/10245294221107851","url":null,"abstract":"In recent years the pharmaceutical industry has been accused of prioritising profits from patents at the expense of the wellbeing of patients. Many argue that this transition reflects the full-scale financialization of the industry, whereby an increasing focus on shareholder value and financial performance has resulted in cost-cutting, outsourcing and novel forms of competition based on securing new patents and intellectual property rights through mergers and acquisitions (M&As). The aim of this article is to explore the variegated financialization of the pharmaceutical industry through the analysis of M&A data. Acknowledging M&As as a key tenet of pharmaceutical financialization and drawing from a sample of 1805 deals between 2001–2020, we reveal an uneven geography of acquirers and targets across the global, national and city scales. While we uncover a global rise in the value and volume of M&A deals, this activity is concentrated across a limited geography, with the US the largest market by value and China the largest by volume. Analysing these two countries in depth reveals the importance of institutional and regulatory conditions in not only shaping the implementation of M&As but fundamentally constituting the nature, causes and effects of financialization. These findings allow us to develop a relational conceptualisation of financialization which adds novelty to geographical debates around its uneven causes, processes and outcomes.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"472 - 494"},"PeriodicalIF":3.9,"publicationDate":"2022-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47320760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-20DOI: 10.1177/10245294221105573
Tobias J. Klinge, Reijer P Hendrikse, R. Fernández, Ilke Adriaans
Building on the notion of corporate financialization, this article analyzes the financial dynamics of the world’s largest digital platforms over the period 2000–2020: Alibaba, Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, and Tencent. These “Big Tech” corporations jointly form the infrastructural core of the digital economy. Taking cues from critical media studies and political economy, we probe their financial statements according to three stylized indicators of corporate financialization: (i) expanding financial assets and debt; (ii) augmenting asset structures, with intangible assets in the form of goodwill ballooning alongside tangible capital; and (iii) maximizing shareholder value. Our findings point to commonalities among the ‘avantgarde of digital capitalism’, where feedback loops between mounting market dominance, data extraction, and above-average profits have been successfully leveraged with key tools of corporate financialization to accelerate Big Tech’s infrastructural dominance across economy and society.
{"title":"Augmenting digital monopolies: A corporate financialization perspective on the rise of Big Tech","authors":"Tobias J. Klinge, Reijer P Hendrikse, R. Fernández, Ilke Adriaans","doi":"10.1177/10245294221105573","DOIUrl":"https://doi.org/10.1177/10245294221105573","url":null,"abstract":"Building on the notion of corporate financialization, this article analyzes the financial dynamics of the world’s largest digital platforms over the period 2000–2020: Alibaba, Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, and Tencent. These “Big Tech” corporations jointly form the infrastructural core of the digital economy. Taking cues from critical media studies and political economy, we probe their financial statements according to three stylized indicators of corporate financialization: (i) expanding financial assets and debt; (ii) augmenting asset structures, with intangible assets in the form of goodwill ballooning alongside tangible capital; and (iii) maximizing shareholder value. Our findings point to commonalities among the ‘avantgarde of digital capitalism’, where feedback loops between mounting market dominance, data extraction, and above-average profits have been successfully leveraged with key tools of corporate financialization to accelerate Big Tech’s infrastructural dominance across economy and society.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"332 - 353"},"PeriodicalIF":3.9,"publicationDate":"2022-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42525615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-17DOI: 10.1177/10245294221085639
F. Marty, Thierry Warin
We propose a simple theoretical model emphasizing the importance of a multi-sided platform (MSP) in fostering innovation. This model aims to assess the effects of structuring industries around an MSP on innovation dynamics and emphasizes the impact of cross-platform competition. It teaches us how to encourage cross-platform competition in terms of competition policy. The outcome is threefold. To begin, the presence of an MSP is critical for market innovation. Second, our findings indicate that skewed market power in favor of the MSP may stifle innovation in this industry, even if the negative impact on the industry’s rate of innovation is not immediately apparent. Finally, we demonstrate that industries with multiple MSPs have a higher rate of innovation. The model’s conclusions emphasize the critical importance of preserving the contestability of digital markets through competition rules enforcement. Even if the inherent technical characteristics of this industry result in a situation of dominance, competition rules should aim to preserve the possibility of market competition through, among other things, interoperability requirements, data portability requirements, and control of exclusivity clauses.
{"title":"Multi-sided platforms and innovation: A competition law perspective","authors":"F. Marty, Thierry Warin","doi":"10.1177/10245294221085639","DOIUrl":"https://doi.org/10.1177/10245294221085639","url":null,"abstract":"We propose a simple theoretical model emphasizing the importance of a multi-sided platform (MSP) in fostering innovation. This model aims to assess the effects of structuring industries around an MSP on innovation dynamics and emphasizes the impact of cross-platform competition. It teaches us how to encourage cross-platform competition in terms of competition policy. The outcome is threefold. To begin, the presence of an MSP is critical for market innovation. Second, our findings indicate that skewed market power in favor of the MSP may stifle innovation in this industry, even if the negative impact on the industry’s rate of innovation is not immediately apparent. Finally, we demonstrate that industries with multiple MSPs have a higher rate of innovation. The model’s conclusions emphasize the critical importance of preserving the contestability of digital markets through competition rules enforcement. Even if the inherent technical characteristics of this industry result in a situation of dominance, competition rules should aim to preserve the possibility of market competition through, among other things, interoperability requirements, data portability requirements, and control of exclusivity clauses.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"184 - 204"},"PeriodicalIF":3.9,"publicationDate":"2022-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43398868","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-09DOI: 10.1177/10245294221105567
Bartholomew Paudyn
Repeated crises have proven credit rating agency (CRA) models/methods erroneous and “business-as-usual” unsustainable. Nevertheless, considerable dubious “default risk” management and technoscientific capitalist expertise remain unchanged. Unpacking sovereign ratings, we appreciate how “debt sustainability analysis” (DSA) distortions underpin expertocratic CRA (default) anomaly. Their neoliberal “politics of limits” performance helps market (shareholder) imperatives trump those of democratic (stakeholder) politics. Given surging inflation and debt (distress) to remedy Covid-19-induced shocks, ratings aid constitute and (re)validate the subjectivities/affinities and organizational conditions advancing a “self-equilibrating,” “self-generative” agencement political economy of creditworthiness (PEC). Antagonizing sustainable budgetary government’s programmatic/expertocratic and operational/democratic asymmetry, econophysics ratings diminish fiscal sovereignty. Universal PEC management through hybrid credit risk/uncertainty qualculation mitigates negative externality contestation shielding CRAs from serious reform. Ratings procyclicality and contagion reinforce this precarious sociotechnical agencement PEC as the status quo.
{"title":"Financially engineering a “self-generative” political economy of creditworthiness: Expertocratic exemption problems for sustainable debt and democracy","authors":"Bartholomew Paudyn","doi":"10.1177/10245294221105567","DOIUrl":"https://doi.org/10.1177/10245294221105567","url":null,"abstract":"Repeated crises have proven credit rating agency (CRA) models/methods erroneous and “business-as-usual” unsustainable. Nevertheless, considerable dubious “default risk” management and technoscientific capitalist expertise remain unchanged. Unpacking sovereign ratings, we appreciate how “debt sustainability analysis” (DSA) distortions underpin expertocratic CRA (default) anomaly. Their neoliberal “politics of limits” performance helps market (shareholder) imperatives trump those of democratic (stakeholder) politics. Given surging inflation and debt (distress) to remedy Covid-19-induced shocks, ratings aid constitute and (re)validate the subjectivities/affinities and organizational conditions advancing a “self-equilibrating,” “self-generative” agencement political economy of creditworthiness (PEC). Antagonizing sustainable budgetary government’s programmatic/expertocratic and operational/democratic asymmetry, econophysics ratings diminish fiscal sovereignty. Universal PEC management through hybrid credit risk/uncertainty qualculation mitigates negative externality contestation shielding CRAs from serious reform. Ratings procyclicality and contagion reinforce this precarious sociotechnical agencement PEC as the status quo.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"354 - 379"},"PeriodicalIF":3.9,"publicationDate":"2022-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47957698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-09DOI: 10.1177/10245294221107489
A. Szalavetz
Drawing on data from Hungarian manufacturing companies, this paper aims to explore the ways in which digital technologies affect the nature and routineness of work. It concludes that digital technologies impinge on some defining features of occupations, such as workload and intensity of work; the degree to which the tasks can be explicitly defined, measured and codified; composition and amount of skills required for task execution; and the importance of experience or tacit knowledge for task execution. Non-technological factors, such as managerial approach to technology and work design moderate outcomes. Evidence indicates that a reduction in the routine content of job tasks applies only to relatively skilled employees. For low-skilled employees, certain digital assistance solutions increase routine and engender deskilling. We conclude that a qualitative enrichment of shopfloor work becomes apparent only if (1) employees are skilled enough to become upskilled – and thus engaged not only in digitally enabled but also in digitally augmented, high-value activities; (2) employees’ work tasks are reorganised, work design and work practices modified, and employees upskilled. Without appropriate managerial interventions envisaging the augmentation of work, digital technology implementation entails deskilling and/or technological unemployment, rather than providing richer dimensions to shopfloor work.
{"title":"Digital technologies shaping the nature and routine intensity of shopfloor work","authors":"A. Szalavetz","doi":"10.1177/10245294221107489","DOIUrl":"https://doi.org/10.1177/10245294221107489","url":null,"abstract":"Drawing on data from Hungarian manufacturing companies, this paper aims to explore the ways in which digital technologies affect the nature and routineness of work. It concludes that digital technologies impinge on some defining features of occupations, such as workload and intensity of work; the degree to which the tasks can be explicitly defined, measured and codified; composition and amount of skills required for task execution; and the importance of experience or tacit knowledge for task execution. Non-technological factors, such as managerial approach to technology and work design moderate outcomes. Evidence indicates that a reduction in the routine content of job tasks applies only to relatively skilled employees. For low-skilled employees, certain digital assistance solutions increase routine and engender deskilling. We conclude that a qualitative enrichment of shopfloor work becomes apparent only if (1) employees are skilled enough to become upskilled – and thus engaged not only in digitally enabled but also in digitally augmented, high-value activities; (2) employees’ work tasks are reorganised, work design and work practices modified, and employees upskilled. Without appropriate managerial interventions envisaging the augmentation of work, digital technology implementation entails deskilling and/or technological unemployment, rather than providing richer dimensions to shopfloor work.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"277 - 301"},"PeriodicalIF":3.9,"publicationDate":"2022-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46447459","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-20DOI: 10.1177/10245294221097066
Sebastián Fernández Franco, Juan M. Graña, David Flacher, Cecilia Rikap
This paper examines the innovation strategy of Siemens, a key player in Europe’s digital economy, by performing network and lexical analyses using data derived from Siemens’s patents and scientific publications since 1998. We observe that the company’s innovation efforts evolved from a broader attempt to develop internal information and communication technology (ICT) capabilities – alongside its historical industrial priorities – to a strategy focused on developing artificial intelligence (AI) for sector-specific and niche applications (such as life and medical sciences). As a result, it became dependent on tech giants’ clouds for accessing more general AI services and digital infrastructure. We build on the intellectual monopoly literature focusing on the effects of tech giants on other leading corporations, to analyse Siemens’s experience. By abandoning the development of general ICT and given the emergence of tech giants as digital economy intellectual monopolies, we show that Siemens is risking its technological autonomy towards these big tech companies. Our results provide clues to understand the challenges faced by Europe and its firms in relation to US and Chinese tech giants.
{"title":"Producing and using artificial intelligence: What can Europe learn from Siemens’s experience?","authors":"Sebastián Fernández Franco, Juan M. Graña, David Flacher, Cecilia Rikap","doi":"10.1177/10245294221097066","DOIUrl":"https://doi.org/10.1177/10245294221097066","url":null,"abstract":"This paper examines the innovation strategy of Siemens, a key player in Europe’s digital economy, by performing network and lexical analyses using data derived from Siemens’s patents and scientific publications since 1998. We observe that the company’s innovation efforts evolved from a broader attempt to develop internal information and communication technology (ICT) capabilities – alongside its historical industrial priorities – to a strategy focused on developing artificial intelligence (AI) for sector-specific and niche applications (such as life and medical sciences). As a result, it became dependent on tech giants’ clouds for accessing more general AI services and digital infrastructure. We build on the intellectual monopoly literature focusing on the effects of tech giants on other leading corporations, to analyse Siemens’s experience. By abandoning the development of general ICT and given the emergence of tech giants as digital economy intellectual monopolies, we show that Siemens is risking its technological autonomy towards these big tech companies. Our results provide clues to understand the challenges faced by Europe and its firms in relation to US and Chinese tech giants.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"302 - 331"},"PeriodicalIF":3.9,"publicationDate":"2022-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49217737","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-17DOI: 10.1177/10245294221103069
H. Liu, G. Lim
Extending the growing literature within international political economy, this article puts forth the notion of transnational state capitalism, taking into account the anaemic growth gripping the global economy since the 2008 economic crisis and China’s massive efforts to export infrastructure following the launch of the Belt and Road Initiative (BRI) in 2013. Focussing on the agencies, practices and outcomes of the Jakarta-Bandung High Speed Rail, one of the largest infrastructure undertakings in Southeast Asia since the BRI’s inception, this article explores how and to what extent state capitalism has shaped the political economy of a rising China in Indonesia. We identify three characteristics of an emerging transnational state capitalism in Southeast Asia: state-centric in its overall direction and operation; simultaneous pursuit of economic-cum-geopolitical interests; and an inability to stem structural weaknesses associated with statist economic directives (which have been further complicated by its intertwining with host state dynamics). Our central argument is that although this project was initially conceived as a business-to-business arrangement, it has increased the appeal of state intervention in a transnational context. The driving forces include Indonesia’s political economy and the Chinese state-owned enterprises’ dual agenda of seeking profits and advancing geopolitical goals. We also argue that the project’s statist nature has brought about some side-effects such as inefficient resource allocation and incumbency bias, thus raising concerns about the vulnerability of state capitalist models. Our findings highlight the importance of conceptualizing the transnational state against the backdrop of a globalizing China, going beyond parochial understandings of this increasingly salient phenomenon.
{"title":"When the state goes transnational: The political economy of China’s engagement with Indonesia","authors":"H. Liu, G. Lim","doi":"10.1177/10245294221103069","DOIUrl":"https://doi.org/10.1177/10245294221103069","url":null,"abstract":"Extending the growing literature within international political economy, this article puts forth the notion of transnational state capitalism, taking into account the anaemic growth gripping the global economy since the 2008 economic crisis and China’s massive efforts to export infrastructure following the launch of the Belt and Road Initiative (BRI) in 2013. Focussing on the agencies, practices and outcomes of the Jakarta-Bandung High Speed Rail, one of the largest infrastructure undertakings in Southeast Asia since the BRI’s inception, this article explores how and to what extent state capitalism has shaped the political economy of a rising China in Indonesia. We identify three characteristics of an emerging transnational state capitalism in Southeast Asia: state-centric in its overall direction and operation; simultaneous pursuit of economic-cum-geopolitical interests; and an inability to stem structural weaknesses associated with statist economic directives (which have been further complicated by its intertwining with host state dynamics). Our central argument is that although this project was initially conceived as a business-to-business arrangement, it has increased the appeal of state intervention in a transnational context. The driving forces include Indonesia’s political economy and the Chinese state-owned enterprises’ dual agenda of seeking profits and advancing geopolitical goals. We also argue that the project’s statist nature has brought about some side-effects such as inefficient resource allocation and incumbency bias, thus raising concerns about the vulnerability of state capitalist models. Our findings highlight the importance of conceptualizing the transnational state against the backdrop of a globalizing China, going beyond parochial understandings of this increasingly salient phenomenon.","PeriodicalId":46999,"journal":{"name":"Competition & Change","volume":"27 1","pages":"402 - 421"},"PeriodicalIF":3.9,"publicationDate":"2022-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43925065","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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