Whose success? The state–foreign capital nexus and the development of the automotive industry in Slovakia

Abstract

Using the case study of Slovakia, this article considers the role of the state in the rapid growth of the automotive industry in integrated peripheral markets of the global automotive industry. Although this growth has been mainly driven by the investment strategies of automotive lead firms, the state has played an important role by accommodating the strategic needs of foreign capital through neoliberal economic policies. In addition to secondary sources, the empirical research is based on a 2010 survey of 299 Slovak-based automotive firms with a response rate of 44% and on 38 on-site firm-level interviews conducted between 2011 and 2013 and one in 2005. The analysis draws upon approaches in economic geography, international political economy and upon global value chains and global production networks perspectives to argue that the successful development of the automotive industry in Slovakia has been achieved at the expense of its overwhelming dependence on foreign capital and corporate capture. The article considers the potential consequences of dependent industrial development for the domestic automotive industry and its position in the international division of labor.