What are the underpinnings of workplace transformation in the developing world? I address the question by examining the diffusion of modular production practices across 30 export processing zones in the Dominican Republic (DR) in the turbulent 1990s. I find that public officials responded to a series of external shocks by facilitating the transfer of modular methods to domestically owned factories in particular and conclude that organizational innovations are more likely to be co-produced by developing country firms and their governments in turbulent times than produced in isolation (or good times) by either. Finally, I corroborate my findings by exploring the negative case of Mexico, where the absence of government support has stymied the diffusion of modular manufacturing methods.
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