I argue that this structural power varies according to the type of firms attracted by the specific (institutional) comparative advantages of a respective location.

Consequently, the leeway available for tackling the challenges of MNCs depends on the structural power of business, which captures employer exit capacity from an economy. Explaining such variation, I incorporate and build upon the structural power literature. Drawing on Billett and Smith (2003), I distinguish between ‘compelling’ VET policies that punish MNCs that do not train (resembling beneficial constraints) and ‘encouraging’ VET policies that aim to generate purely voluntary firm commitment. My outcome of interest is not the training participation of MNCs, but variation in the design of policies with which a variety of actors try to trigger such participation. I find that reactions vary significantly between different locations and are therefore not consistent with theoretical expectations that suggest an overall movement toward nonconstraining policies. I observe how actors in the governance of dual VET react to problems of increased globalization and loosened beneficial constraints and try to trigger training 3 participation of MNCs. Collective skill formation is a prime example of collective goods provision as employers, their associations and the state cooperate in order to provide dual VET via school-and firm-based learning ( Busemeyer and Trampusch, 2012). Increased capital mobility potentially leads to increased exit capacities by business (emphasized by CPE) in addition to an influx of multinational companies (MNCs) 2 that are often not anchored in the institutional environment of their new host countries (emphasized by International Human Resource Management, IHRM).Ĭombining CPE and IHRM accounts, I examine how globalization affects the provision of collective goods. However, influential accounts have argued that globalization loosens these constraining institutions, making cooperation rather voluntary (Streeck, 1997 b, 2009 Whitford et al., 2018). Following Streeck (1997 a), such cooperation in the provision of economically beneficial collective goods can be the result of institutions that constrain employer behavior (beneficial constraints). Rational-choice as well as historical institutionalism highlights that cooperation in the provision of collective goods is not self-sustaining and depends on specific institutional conditions, i.e.

1 Due to coordination problems and uncertainties about future long-term benefits, markets struggle to sufficiently supply such goods. Collective goods provision is especially predominant in coordinated market economies (CMEs) ( Hall and Soskice, 2001), where manifold private and public actors cooperate in the provision of research networks, wage restraint through collective bargaining, social peace, patient capital or specialized but transferable skills through collective vocational education and training (dual VET) ( Streeck, 1992 Thelen, 1994). Globalization has been one of the most controversial topics in comparative political economy (CPE), often said to contribute to the erosion or transformation of institutions providing collective goods. In contrast, a location with more diverse comparative advantages is able to implement more compelling policy elements that punish uncooperative firms. It must accordingly reshape collective goods provision around policies favored by business. Comparing collective skill formation in two heavily globalized cantons of Switzerland, I show that a region fundamentally relying on low-tax policies sees its hands increasingly tied in the face of globalization. I argue that these challenges do not lead to convergence between globalized locations as the structural power of business depends on the type of firms attracted by local institutional comparative advantages. Increased capital mobility, characterized by new exit opportunities for business and an influx of multinational companies not anchored in their new home-countries’ institutional environment, loosens those ‘beneficial constraints’. Collective goods provision, most prominent in coordinated market economies, depends on certain institutional conditions that constrain employer behavior and trigger cooperation.