Causes and Impacts of Local Institutional Variation in the ...



Globalization, Institutions, and Varieties of Industry Change in the Tobacco and Hog Farming Industries

Dissertation Proposal

Ryan Denniston

Department of Sociology

Duke University

April 7, 2006

Revision 5

Proposed Committee: Gary Gereffi, Chair

David Brady

Bai Gao

Suzanne Shanahan

Kenneth Spenner

I. Introduction

The US agricultural sector underwent dramatic changes in size and operation throughout the twentieth century. These changes both coincided with waves of globalization and effected substantial increases in capital investment and declines in the size of the population employed in this sector. The beginning of the 1960s brought the most recent wave of global market integration to US agriculture (Dimitri, Effland, and Conklin 2005: 7), and at the national level, the economic impacts of expanded markets increased while national barriers to market integration fell. Compounding a study of globalization’s role in domestic change is the diversity within the United States in these economic impacts, the consequent trajectories of change, and the role of global markets.

This project will ascertain the drivers of these changes and their variation within the United States through a comparative analysis of two agricultural industries and their evolution in the United States during the most recent period of globalization, beginning in 1960. The primary research question is why, given a similar structural environment provided by the US context, different trajectories of change emerge and producer differences persist within each industry as globalization develops. This project advances an institutional explanation (Meyer and Rowan 1977; DiMaggio and Powell 1983; Fligstein 1996, 2001) to argue that industries form differently across locations within the United States, creating differences in the impacts of and responses to global markets and reflected by differences in economic changes and policy developments. The constitution of industries across locations varies, leading to variation in the institutions generated as actors work to secure stability and advantage in markets (Fligstein 2001: 11).

For example, North Carolina and Iowa are currently the two largest hog farming states, but North Carolina’s rise to prominence only occurred over the last two decades and arose largely due to the expansion of corporate farming. In contrast, Iowa hog production continues to rely primarily on family farming, and corporate farming is strictly limited. Similarly, differences in characteristics of tobacco producers across American states persist, and by some measures expand, as global markets play a larger role. Is this diversity only the result of globalization, where the “functional integration of […] internationally dispersed activities” across national borders (Dicken 2003) involves domestic industry in global industries in different ways? Or, is there a relationship between how industries form within a given location and the impacts of global markets?

Industries are composed of different types of actors, and integration into global markets brings increased competition.[1] While the principal economic impacts will differ depending on the competition faced by these specific firms, this competition also entails a disruption of established social orders and environments (Fligstein 2001; Martin 2003). Consequently, the institutional perspective argues that how actors will react to market change is as much the product of these social orders and established patterns of behavior.

The proposed research must establish a relationship between global market integration and changes in domestic industries. The research also seeks an answer to the puzzle of diversity within the United States in these changes and impacts. I tie the local environments within which actors reside into the process of adjustment to globalization and market change through an institutional explanation. The research approaches these objectives through comparisons between industry cases and within industry cases.

The tobacco and pork industries differ with respect to the difficulties faced by processors and by the existence of a price support system for farmers. These crucial differences provide the comparison with the ability to assess the relative roles of globalization and industry factors in shaping changes in farming activities. Specifically, tobacco farmers operated under a price support system that limited the ability to relocate production and pushed prices above prevailing market levels. They also operated in an industry that faced a downturn as consumption declined (ERS/USDA Briefing Room 2005b). By contrast, hog farming underwent significant concentration and location shifts as the pork industry shifted to year-round production and a larger role for exports (Haley 2004: 12-13; Charleston 2004). While globalization impacted both industries, the differences between industries should create different patterns of change in farming.

However, significant differences within each industry in where production takes place, the size of farms, the presence of processors, and the role of global markets also exist. The within case comparisons disentangle the relative importance of industry characteristics and local departures from these characteristics in shaping development trajectories over time through the formation of institutions. Globalization will impact any industry in different US states differently, depending on the industry structure present in the state. However, if the institutional perspective is correct the effects of global markets will be mediated at locally and will be reflected in specific directions of state policy.

I address specific aspects of the potential explanations for the observed variation in the literature review. I then provide more detail on the design for the proposed research and logic behind the comparisons. I present preliminary research and conclude with a brief discussion of the importance of the proposed research to economic sociology.

II. Literature Review

The proposed research explains why differences in the characteristics of production exist and persist within a single national and industry context. These differences occurred as markets reoriented toward the global in operation (Dimitri, Effland, and Conklin 2005: 7; Dicken 2003). The institutional explanation argues that the threatened or advanced interests of economic actors, and their consequent actions, depend on the environments in which they exist. The state is a key actor in modern economies, and it is both the target of action on the part of other economic actors and a possessor of interests of its own. Consequently, environments develop characteristics over time as actors develop distinct interests with respect to the state and other industry actors, leading to variation in trajectories of development and responses to globalization.

This research contributes to the markets as politics perspective (Fligstein 1996; Fligstein 2001), the departure point for the institutional argument advanced, by clarifying two important factors identified by the research site. First, attention to industries clarifies the boundaries of a field of action by orienting it toward a specific set of producers existing within stages of a process of production. Second, the exploration of the US state level highlights the multiple levels of political authority that compose state. These two factors allow for the development of different institutional environments within national economies. The explanation and the concepts employed are discussed in detail below.

Industries and Actors

I conceptualize industries in this project as fields of interaction among sets of firms, related to one another as competitors or collaborators in a process of production. This definition encapsulates the social structures that form between related actors (White 1981: 518; Fligstein 2001: 31), but also emphasizes the differences in industry power that exist among roles in the productive process (Gereffi and Korzeniewicz 1994; Williamson 1985). The causal underpinnings of this conception follow the markets as politics approach (Fligstein 1996). However, this conceptualization of the industry attaches importance to both producers within a given role and producers occupying different roles in an encompassing productive process to institutional formation. In agricultural industries, the inclusion of both processors and farmers provides a more concrete set of actors driving the institutional explanation and allows for testing of other industry approaches, namely industry-centric and global commodity chains approaches.

Institutional explanations, including the markets as politics approach, emphasize the importance of patterned relations, which achieve “a rule-like, social fact quality” that transcend the specific actors and contexts in which they form (Zucker 1987: 444; Meyer and Rowan 1977; DiMaggio and Powell 1983). The construction of institutions is a cultural project that takes place within fields of interaction among actors (Fligstein 2001: 29; Martin 2003). In turn, these institutions determine the actors involved in a market, the relations between and social status of constituents, and the conditions under which actors operate (Fligstein 2001; DiMaggio and Powell 1983). The markets as politics approach addresses the lack of a model for agency and institutional change (Zucker 1987: 445-446) through the incorporation of action as existing within structured fields.

Action is motivated by the general need for stability and the propagation of advantage on the part of constituents (Fligstein 1996: 657). The ability of a firm to generate favorable change varies according to the market role granted by the status hierarchy (Fligstein 2001: 31, 35). Because participants and histories of institutional formation differ across similar markets, differences in the characteristics of contexts and the interests and motivations of similar actors can develop (Hamilton and Biggart 1988; Biggart and Guillén 1999). However, these differences hinge on the constitution of the institutional field, which determine the legitimate parties to action within any field.

In contrast, the global commodity chains approach (Gereffi and Korzeniewicz 1994) more concretely identifies actors according to where they fit in the productive process. Industries represent coherent, interorganizational systems of production, with central management on the part of industry leaders. Each position carries a different level of ability to organize the productive process, a key source of industry power, as well as a different portion of the value of the final good produced. Actors are strategic and are able to pursue advantage by altering the organization of the industry in various ways (Gereffi 2001: 1622). For example, lead firms may integrate vertically, divest industry functions, or relocate production to more efficient locations, which alters the structure of industries over time and influence the motivations of actors in other stages of production.

These contrasting perspectives raise two important factors for globalization and its effects on domestic industry structure. First, stages of the productive process may globalize at different rates because they are variously competitive as firms “plug into” international networks of production (Bair and Gereffi 2001; Gereffi, Spener, and Bair 2001). In the global commodity chains approach, variation in outcomes is the result of differences in the role of global markets, while the institutional perspective attributes variation to differences in the interests of actors and the formative role of environments in shaping these differences. Second, because globalization develops through the actions of firms in reorganizing production (Gereffi 1994), higher levels of globalization entail a cost to some actors in the industry. This draws attention not only to the magnitude of globalization, but to which actors drive change and take advantage of expanded markets. For this reason, an appropriate test of the institutional explanation must reorient the institutional field to include actors that directly impact the operation of an industry.

Markets and the Role of the State

The state is conceptualized as a dominant economic actor which exists at multiple levels of authority, contains its own interests, and acts within the confines of an institutionalized role. The markets as politics approach attributes to the state a central role in the process of institutional formation through its role as an arbiter and an interested party in modern markets (Fligstein 2001: 37-41). More importantly, state intervention is both an outcome of a process of institutionalization and is oriented toward specific fields of action (49). As economic actors appeal to the state for intervention and codification of dominant practices, the role of the state in economies develops. This departs from non-institutional work in its theorization of state action and interests as arising from specific environments, and not exogenous to industries or economic action.

Cross-national differences in economic organization indicate differences in the execution of state intervention and the role of the state in the economy (Berger and Dore 1996; Hall and Soskice 2001; Hamilton and Biggart 1988; Dobbin 1994; Fligstein 2001). The outlined perspective embeds the state within fields of action; like other economic actors, the state develops in relation to the markets and constituencies for which it is responsible. Standard patterns of state action toward emerging problems develop (Dobbin 1994: 10-11), affecting “the problems perceived and the solutions conceived” on the part of the state (19-20). While intervention will occur when large and incumbent firms are threatened by economic conditions (Fligstein 2001: 83), it will also occur when state interests are threatened (Dobbin 1994; Evans 1995; Hall and Soskice 2001), which develop over time in similar fashion to the interests of other actors.

The development of the role of the state in relation to specific fields of action becomes a critical consideration when the state is disaggregated into multiple levels of political authority. Differences are present in the local exercise of political power (Segal and Thun 2001; Thun 2004; Skocpol 1992; Zhou 1993), indicating the salience of the state at levels other than the national. The existence of salient political authority at the US state level enables economic development and policy to take very different forms. At this level, states will vary with respect to the constituencies served, the economic crises faced, and the consequent trajectories of industry development (Fligstein 1996: 659).

Summary

The markets as politics perspective orients attention toward fields of interaction, where environments develop as different sets of industry actors interact with the state to achieve objectives, thereby shaping the evolution of these environments and the interests of actors over time. Multiple levels of political authority will create differences in actor behavior and motivations on the part of the state for action. This departs from other institutional accounts in its attention to multiple salient political authorities. It also departs from the other explanations in its attribution of actor interests as dependent on the environments in which the actors operate. Durable differences in the dependent variable will not be purely the product of different types of participation in global markets or varying levels of globalization, but will also depend on the process whereby environments react to expanded markets. Tracing industries at the level of the US state casts political authority as theoretically significant to economic outcomes because it centers attention on differences within the United States in the structure of industries and the path dependent histories of state intervention in these industries.

An industry-centric account of globalization would expect differences in development trajectories across US states as production relocates to where it is most efficient. Concentration into specific locations and increasing size of producers would be the logical outcome of actors taking advantage of scale economies where they were efficient. Inefficient production would be accompanied by declines in production over time. Finally, producers should grow more similar across locations over time.

Both the institutional and global value chains arguments can explain durable differences in the characteristics of producers. In the case of global value chains, industry actors “plug in” to global industries, pushing the advantages they contain onto the international market, driving the expansion of globalization. Competitive industry activities will, grow as a whole due to both scale economies and efforts to reshape the operation and organization of the industry through the activities of lead firms. However, because industry governance accrues to where significant barriers to firm entry exist (Gereffi 1994: 99), processors will drive industry developments in the two cases. Though globalization may entail different effects in the two industries, differences at the state level should be correlated with differences in the competencies of producing firms.

The institutional perspective also draws attention to differences in the structure of industries. However, primary attention focuses on the role of the state and how its role is structured as actors face changing environments. Actors facing crisis will drive political developments, but developments will only break sharply with precedent when severe crisis is encountered. Second, the reaction to globalization in terms of policy will depend on when constituents face crisis, which draws attention to differences in the timing of political developments. Finally, the inclusion of both producers and processors enables the model to ascertain which actors drive change. The institutional argument would not expect production to be increasingly similar in character across all locations, it would not expect global markets to play similar roles in the case industries across locations, and it would not expect state intervention to be similar across states. Instead, globalization throws each environment into disarray, motivating political action. This action, and the resulting policy outcomes, will depend on how the state reacted to previous periods of crisis, the mix of producers present within the state, and the relative importance of agriculture and these specific industries to the economy and to state interests.

III. Design, Data, and Methods

The institutional explanation is tested through two distinct stages. First, a comparative exploration of the pork and tobacco industries in the United States from 1960 on will describe how these industries operate, how they have changed in light of globalization, and the degree to which these factors vary within the United States. The research will examine where production takes place, the changes in these locations over the research period, and the characteristics of producing firms in the industry. Primary attention is also given to how global markets impact domestic industry through heightened competition. As previously mentioned, both an institutional and global value chains explanation can account for durable differences across locations over time. Sustained diversity within the US should both rule out the industry-centric account of globalization and provide an account of industry change by which to assess the markets as politics and global value chains explanations. In order to assess whether globalization itself varies in manifestation and impact across the United States, the first stage must also include an assessment of the role of globalization in industry change.

The dependent variables of interest, industry location and producer characteristics, are measured in several ways. Industry location is measured as the percentage of national production occupied by a given state. Producer characteristics, namely concentration, are measured as the average size of producing firms relative to the national average. Both measures are measured statically and as rates of change over time, which will account for industry changes over time in light of different starting points for industry producers across states. Producer characteristics will also include an assessment of where producers fit into the productive process. This will be especially important for the global value chains and institutional explanations.

Globalization represents a period of market expansion, facilitated through declines in barriers to trade and manifested in increases in trade. How expanded markets affect domestic industries depends on the theoretical explanation employed. An industry-centric account of globalization would focus how competition from international markets directly affects domestic producers, and the study measures this competition through trade in and competitiveness of both raw materials and processed goods, factoring in the barriers to trade of these goods. These are the key aspects on which the two industries vary. But to address the global value chains and institutional explanations, this study also attempts to assess variation in the role that global markets play at the state level. Variation in the level and form of globalization is expected insofar as industry structures vary across states, leading to different effects of globalization. However, controlling for industry structure at the state level, only the global commodity chain and markets as politics approaches would expect to continue to see variation in the impact and level of globalization across states.

The second stage of research addresses the question of whether the formation and development of each industry affects change as globalization unfolds. The markets as politics perspective explicitly theorizes the state as inextricably bound to the formation of institutions and actor interests. Actors will respond to globalization in different ways, depending on underlying institutions as much as where actors fit into the industry and the productive process. In contrast, the global commodity chains approach treats globalization as driven by actors’ efforts to capitalize on advantages presented by global markets. Globalization does not entail costs for disadvantaged industry firms, in all cases, but the benefits will accrue to those firms able to drive industry change (Gereffi 1994). While differences in the resources available to industries at the state level may enable industries to “plug into” global industries in different ways, the global commodity chain does not expect systematic variation across states or systematic differences in economic policy across states. The contrast between these two perspectives center on the source of actor interests and the importance of the state in structuring industries.

I utilize within-case comparison (Mahoney 2003) to assess differences in the trajectories of change within each industry in light of increasing globalization. These differences include the operation of the case industries within selected states and industry-related developments in the political sphere. From the institutional perspective, globalization is a policy development similar to those that created national markets out of disparate local markets. Internationally competitive components of industries will drive globalization, but state intervention to mediate the effects is expected under specific circumstances. State intervention is more likely to accompany widespread crisis, failure of important firms, and the interpretation of industry changes as specific threats to previously protected classes of producers. Consequently, different policy developments and different trajectories of policy development (Aminzade 1992; Stryker 1996: 312; Goldstone 1998; Dobbin 1994) due to different industry structures and histories of state intervention within local fields will be expected. In contrast, state-level variation in industry structure may promote different capacities of industries to globalize. However, the state is not expected to shape the interests of actors and the development of industries directly. States should not respond to similar actors in different states in different ways.

The analysis of political developments will involve the identification of developments critical to industry structure and responsive of industry constituent crisis. The research will construct historical accounts of state intervention and political activity on the part of industry actors using primary policy sources and secondary sources. From the markets as politics perspective, I expect industries to develop rules and restrictions governing action, consequently producing local variation in trajectories of change. Second, I expect differences in policy outcomes to be related to differences in industry constitution and the interests of the state, further supporting the institutional explanation. These policy differences will operate through various mechanisms, such as through legal constraints on behavior, differences in subsidy levels, and the priority industry actors receive in other forms of state assistance. Finally, the timing of these developments will also be assessed in order to causality behind state intervention and political behavior of industry actors. A general picture of market crisis and state intervention will be established through attention to different precedents of state intervention, industrial structures, and threats to producers brought by globalization.

Primary data on industry establishments, the number of workers, production, subsidies, and income comes from the United States Department of Agriculture’s Census of Agriculture, the annual Agricultural Statistics Yearbook, and the Economic Census of the United States. Data on international market participation comes from the Foreign Agricultural Trade of the United States data source. Additional primary and secondary sources are used to gauge tariff and quota levels and international participation of states. Finally, as mentioned, primary and secondary policy and industry sources are used to explore the state-level political aspects of industry development and globalization.

IV. Case Selection and Preliminary Research

The research site is the pork and tobacco industries within the United States from 1960 forward. The comparison of these industries contains several advantages. First, both industries integrated into global markets over the research period, but faced different competitive threats vis-à-vis international markets. In addition, the two industries vary with respect to the ability to relocate production due to both environmental conditions and federal restrictions. Finally, the industries contain both agricultural producers and processors, fundamentally different types of producers related through a coherent process of production. The inclusion of these relationships allows for a better understanding of changes among producers as an outcome of changes within the entire productive process.

Though the population of farms has declined throughout the twentieth century, farming’s historical importance as a livelihood before industrialization would have brought governments into roles as economic actors, particularly at the local level and during previous periods of globalization and economic crisis (Lake 1989). The study of agricultural industries thus provides the study with the ability to observe the development and change in local government intervention in the economy. Finally, because farming is a geographically widespread activity, conclusions based on the limited set of states involved in the case industries should be generalizable to other US states. I briefly discuss the two case industries and theoretically important states below. Table 1 provides basic information for agriculture in general as well as the two industries

[Table 1 about here]

Tobacco Industry

Until 2005, tobacco production was regulated at the Federal level through a system of price supports and marketing quotas dating to the Great Depression. This program aimed to stabilize farm incomes and supply for processors, but as quota prices rose, domestic production became relatively expensive compared with rising international production. While globalization entailed greater competition for tobacco farmers (Capehart 2005), it reduced raw material prices for processors because of the availability of cheaper international alternatives.

Within the industry, raw material production peaked in 1963, fluctuated at a slightly lower level from this time to 1975, and declined after 1975 (ERS/USDA Briefing Room 2005a). The late 1990s witnessed the beginning of especially sharp declines for producers, brought on by declining international and domestic demand. For processors, US cigarette consumption peaked in 1981 (ERS/USDA Briefing Room 2005a). Increasingly competitive production in foreign markets reduced the availability of international markets for US producers at a time when domestic consumption declined.

The structure of the tobacco industry and the relative impact of globalization varied across states. The research investigates four states for this industry: North Carolina, Kentucky, Tennessee, and Maryland. Under the quota system, production was allocated at the state level, leaving room for shifts in any state’s share of national production. As shown in Table 2, North Carolina and Kentucky are the two largest tobacco-producing states in the United States, representing more than 68% of US output in 1997 and 66% in 2002. These two states are also the largest producers of the two types of tobacco regulated by price supports. Tennessee was also regulated by price supports, but Maryland was not, allowing for a control for this system.

North Carolina and Kentucky also contained widespread processing industries, while two other important states, Tennessee and Maryland, did not. Finally, a tighter linkage in North Carolina between producers and processors, actively facilitated by the state through funding, provided for producers a more favorable environment for growers to expand (Eastwood, Brooker, et al. 2003).

Concentration and an increase in the size of farms took place in all states as markets expanded. However, this occurred more slowly in Kentucky and Tennessee than in North Carolina. In Maryland, where the Federal quota system did not apply, production all but disappeared. While geography limits the capacity for farm expansion in Tennessee and Kentucky (Capehart 2004), this should create fundamentally different economic and industry conditions in these two states in comparison with North Carolina. Crisis among growers should be manifested in political efforts to promote larger farms in North Carolina, protection of small farmers in Tennessee, and some mixture of policy reflecting both the interests of small farmers and processors in Kentucky. Ecological factors create different actor interests, but they are acted upon politically.

[Table 2 about here]

Pork Industry

While tobacco farms differ in the varieties of tobacco produced, hog farming is divided into stages of production in the life cycle of hogs. Most hog production took place on small operations encompassing birth to achievement of full weight before slaughter. Changes in hog farming over the last two decades involve both a bifurcation at the national level into increasingly large producers and continuing small operations, and a disintegration of hog farming into discreet stages, especially into raising hogs to slaughter weight. Similarly, processors also underwent both concentration and restructuring to take advantage of scale economies. Throughout the 1980s, processors began to grow larger and utilize capacity year-round (Haley 2004: 12-13; Charleston 2004), driving the establishment of reliable, year-round supplies of hogs and stable relationships between producers and processors.

Production in the hog farming industry does not operate under a quota system, allowing for the relocation of production to where it can be most efficient. Primary sites for production seem to contain different and distinct advantages, and different roles of global markets. Iowa’s proximity to sources of grain cast it as the primary center for pork production. But as evidenced by Table 3, production in North Carolina exploded during the 1980s, well after global markets began to form.

[Table 3 about here]

While imports are almost nonexistent to the South, they are now critical to the operation of the industry in the Midwest (Haley 2004: 3). Iowa supplemented traditional hog farming practices by sourcing small hogs from Canada, taking advantage of its advantage in plentiful feed grain to preserve small farm production. In contrast, North Carolina’s limited international exposure coincides with the absence of an organized lobby against the introduction of large-scale farming (Charleston 2004). The development of “factory farms” marginalized the interests of smaller producers and led to the blurring of the line between farming and processing components of the industry to an extent not observed in Iowa.

Aside from the clear economic consequences of these changes to producers, the comparison reveals differences in the interests arrayed within the two states. In the case of North Carolina, the interests of large producers promoted a climate in which small producers are marginalized and in which the state actively promoted the development of large producers. In contrast, the same industry and global market pressures driving the development of factory farms in North Carolina led to the supplement of farming activities through global markets in Iowa. The institutional explanation would expect political developments to reflect the interests of smaller producers and the interests of grain farmers dependent on hog farmers as consumers.

Summary

Both industries reveal differences in characteristics at the state level. The institutional explanation looks to the formative aspects of these industries at the state level to explain the persistence of these differences. I specifically look at political developments as causal to different institutional environments, but include additional variables to account for alternative explanations. The industry cases and within-case states are summarized along these variables in Table 4.

[Table 4 about here]

The industry comparison accounts for an industry-centric account of the impact of global markets on industry change, where changes at the level of the state should not differ within industries. Within each industry, differences across states may be related to the structure of the industry and the consequent ability to “plug in” to global markets or compete in light of these markets. Differences may also be related to the ability of industries to survive market changes through action, which I trace through policy developments within theoretically significant state cases.

V. Conclusion

Globalization brings firms in different nations into competition with one another, but also highlights clear national differences in how firms operate, how industries are structured, and how industries interact with environments. Attention within economic sociology has been drawn to the role of the state in shaping these environments, affecting competitiveness on the global stage and economic effects at the local level. But clear differences in these outcomes also exist within nation-states, presenting nation-centric accounts of development and globalization with a challenge.

This study argues that a better understanding of globalization involves a shift in attention toward the local. The “functional integration of […] internationally dispersed activities” (Dicken 2003) points to the local characteristics of industries in any explanation of economic consequences (Bair and Gereffi 2001). This research contributes to this understanding by advocating a relationship between how industries have formed at the local level over time and how they confront globalization and industry change. The role of the state is key in the markets as politics approach, and while the study encompasses a period where a national market and institutional context exists, the disaggregated nature of political authority in the United States raises the possibility of various types of state responses, often conflicting, to expanding markets. While action will involve the specific needs of industries, action also establishes coherence over time, leading to patterned behavior at future decision points. This necessitates a local perspective when establishing the importance of the state, but more generally, differences within the United States in the characteristics of industries should attract attention to the varieties of industry responses at the local level.

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Appendix – Preliminary Chapter Outline and Objectives

Chapter 1 – Introduction – Lays out the specific problem addressed, identifies the scope of explanation for the study, and briefly discusses the importance of the research to the current state of the literature.

Chapter 2 – Literature Review/Theory – Identifies the major literatures pertaining to the research question. This will identify the key concepts that will be accounted for in each explanation. This will also discuss in the abstract the causal explanations employed by this study.

Chapter 3 – Theory and Research Design – Directly ties the explanations advanced in the previous section to the research site. I identify data sources, operationalizations of the key concepts, and present direct hypotheses based upon the explanations as they are tested in this study

Chapter 4 – Industry case study comparison – This section establishes the characteristics of the industries within the United States and how they have changed over time. It provides an assessment of globalization and its relation to the observed changes in industries. Finally, it measures the variation in industry characteristics and interaction with global markets at the US state level. I expect global markets to play different roles across states. Further, I expect sustained diversity in characteristics of industry actors indicate differences in impacts of globalization and industry change.

Chapter 5 – Applying GCC approach to explain industry change – This section establishes precisely how domestic industries participate in global markets and whether this participation varies at the US state level. I aim to establish how globalization is driven by only some industry participants, processors for example, thereby reshaping domestic industry. I answer whether this perspective explains different impacts of globalization due to differences in the types of firms located in each state or in ability to globalize successfully.

Chapter 6 – Explaining how state matters, the institutional perspective – This section addresses the political activity that takes place at the local level through a comparative study of the political process of adjustment to expanded markets. This involves an assessment of the role of past precedent, political developments related to agriculture as a whole, and responses to specific crises. I expect to see a correlation between precedent and responses to crisis. I expect to see differences across states due to who in the industry is present within the state. Finally, I expect political developments to be causally related to how industries change at the state level.

Chapter 7 – Uniting GVC and institutions (conclusion) – An attempt to draw theory connections between these two literatures. Are these perspectives complimentary? Is the institutional assertion that environments structure interests and action supported by this study?

|Table 1: Characteristics of Agriculture and Selected Agricultural Industries, National Level, 1959-2002 |

| | | | | | |

|Note: All dollar values are nominal. | | | | | | | |

|Table 2: Selected Characteristics of Tobacco Farming and Production - Selected States |

| | | | | | | |

| |North |111.1 |39.9 |22.3 |12.6 |7.9 |-64.7% |

| |Carolina | | | | | | |

| |North |4.0 |10.6 |10.8 |25.3 |

| |Carolina | | | | |

| |North |NA |1,001.8 |700.2 |1,126.4 |630.4 |-10.0% |

| |Carolina | | | | | | |

| |North |654.4 |841.8 |478.1 |696.4 |353.1 |-26.1% |

| |Carolina | | | | | | |

| |North |58.3% |48.8% |37.5% |21.3% |

| |Carolina | | | | |

| |North |NA |33.6% |19.8% |14.4% |9.1% |

| |Carolina | | | | | |

|Table 3: Selected Characteristics of Hog Farming and Production - Selected States |

| | | | | | | | |

| |North |62.1 |15.7 |6.3 |3.1 |2.3 |-62.9% |

| |Carolina | | | | | | |

| |North Carolina |22.9 |215.4 |823.7 |11,935.7 |

| |North |42.7 |284.8 |515.3 |2,570.4 |2,183.6 |323.7% |

| |Carolina | | | | | | |

| |North Carolina |32.6% |19.3% |10.6% |5.2% |

| |North |5.4% |9.6% |14.6% |32.8% |31.4% |115.6% |

| |Carolina | | | | | | |

| |North |0.0% |NA |14.2% |53.4% |64.1% |

| |Carolina | | | | | |

| |North |NA |NA |87.7% |99.7% |99.9% |

| |Carolina | | | | | |

|Table 4: Theoretical Comparisons, Variables and Cases |

| | | | | | | | |

|Comparison Across Industries |Tobacco |Hog Farming | | | | | |

|Presence of Federal price support system |X |O | | | | | |

|Internationally competitive raw products |Declining over time |Growing over time | | | | | |

|Internationally competitive processed products |X |Growing over time | | | | | |

| | | | | | | | |

| | | | | | | | |

| |Tobacco | |Hog Farming |

|Comparisons Across States - Tobacco and Hog Farming |North Carolina |Kentucky |Tennessee |Maryland | |North Carolina |Iowa |

|Industry a high proportion of agricultural producers |X |X |X |X in 1974; O in 2002 | |O in 1974; X in 2002 |X |

|Industry large generator of agriculture revenue |X |X |X |X in 1974; O in 2002 | |O in 1974; X in 2002 |X |

|Significant presence of processors |X |X |O |O | |X |X |

|Industry producers relatively large comapred with nation |X |O |O |X | |X |X |

|Tobacco - Applicable Federal price support program |X |X |X |O | |NA |NA |

| | | | | | | | |

| |Tobacco | |Hog Farming |

|Comparisons Across States - Contextual Variables |North Carolina |Kentucky |Tennessee |Maryland | |North Carolina |Iowa |

|Agriculture sector producers relatively large |O |O |O |O | |O |X |

|Tobacco - Efforts to limit trading in quotas |O |X |X |X | |NA |NA |

|Hog Farming - State effort to push development of operations |NA |NA |NA |NA | |X |O |

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[1] Globalization, in modern times, is the “functional integration of […] internationally dispersed activities” across national borders (Dicken 2003; also see Hall and Soskice 2001: 55; Gereffi 1994). An institutional perspective attributes importance to both heightened competition among firms and competition between the environments in which firms arise and which lead to differences in firm organization, operation, and actor response to market changes (Hall and Soskice 2001; Fligstein 2001).

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