This thesis studies the determinants and outcomes of the skill systems in Mexico and Turkey, two crucial cases of middle-income countries (MICs). Despite the similarities in their previous institutional environments and links to the global economy, Turkey has experienced higher economic growth and better social development compared to Mexico. This PhD project focuses on the Mexican and Turkish skill systems, which have been significant institutions that affect the (different) economic and social characteristics of advanced industrialised countries in the literature on comparative capitalisms (CCs). This study builds its theoretical approach on the arguments of CCs literature and the claims of globalisation, where it draws from the studies on global value chains (GVCs). It scrutinises the patterns of convergence due to globalisation and ongoing divergence because of the variation of institutional structures. It examines the complementarities and outcomes of the skill systems, which will then help to understand the divergence of development experiences between Mexico and Turkey. This PhD project carries out a multi-level research and focuses the empirical study on auto parts-automotive value chains (AACs), which is an important industry for many MICs including Mexico and Turkey. The multi-level research first includes a macro-level study of local institutions in Mexico and Turkey, as well as the convergence patterns through the AACs. This is complemented with a micro-level analysis of firms’ strategies to find workers with technical skills in production functions. The findings show that while there is some convergence in the Mexican and Turkish auto parts producers’ skill needs, firms from these two countries adopt different strategies to address their needs. The distinctive national institutions in Mexico and Turkey, which are shaped by the differences in the state’s involvement, are the main reasons for this divergence. The differences between the Mexican and Turkish skill systems have created different outcomes for both the firms and workers in these countries, and hence are expected to have contributed to their diverging development paths.