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Industrial and Corporate Change 2004 13(5):789-814; doi:10.1093/icc/dth031
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Right arrow F23 - Multinational Firms; International Business
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Industrial and Corporate Change, Vol. 13 No. 5 © ICC Association 2004; all rights reserved

The German connection: shifting hegemony in the political economy of the South African automotive industry

Justin Barnes and Mike Morris

Correspondence: Mike Morris, School of Development Studies, University of KwaZulu-Natal, Durban, South Africa, 4041. Email: morrism{at}ukzn.ac.za

Abstract

Most value chain analyses remain at an abstract level, underplaying political economy issues and the importance of local context. The paper analyses the manner in which global automotive forces (the dominance of the German assemblers and their multinational corporation first-tier suppliers) combine with local institutional influences (the government’s automotive industrial policy) to drive, shape, and restructure the trajectory of the South African automotive industry under the hegemony of the ‘German connection’. It shows ‘how’ and ‘why’ the German corporations, unlike their American and Japanese counterparts, were able to successfully integrate their global value chains with local institutional and policy conditions and reap the benefits. Its conclusions both add to a general understanding of how governance (power, command, control) operates within producer-driven value chains and illuminate the political economy dynamics of German control underpinning the South African automotive industry.


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