National Culture and Business Systems

Abstract

We extend existing research in cultural economics and offer a comprehensive analysis on the impact of culture on the structuring of business systems. In a series of cross-country comparisons, we show that national culture is statistically significant in determining the business systems of a country. Using the Schwartz cultural value model and data on the structuring of business systems, we analyze the impact of national culture on four dimensions of business systems – business strategies, firm-specific human capital, employee participation, and dismissal protection. Our findings suggest several implications for the comparative advantages of business systems and the choice of corporate strategies.