Comparative Capitalism Literature Research Articles

HRM, institutional complementarities, and performance: The case of the Healthcare sector in Jordan

Building on the comparative capitalism literature, we aim to understand the impact of HRM practice on hospitals performance within the healthcare sector in Jordan, and the role of HRM in mitigating and overcoming systemic shortfalls. Two different surveys were distributed for both hospital and HR managers across all hospitals. Our findings indicate that certain HR practices are positively associated with performance, despite contextual challenges such as informal networks and cultural limitations that could undermine efficiency. We further tested the potential impact of HR complementarities on performance; nevertheless, the results did not significantly surpass the explanatory power of the individual HR practices. It might have been anticipated that mutually supportive bundles of practices might compensate for systemic weaknesses. However, it may be the case that players have devised solutions in other areas of managerial practice that may be more effective than HRM in compensating for systemic limitations. Our study also highlights that in oligopolistically structured markets, common in private healthcare systems, the effectiveness of HR practices may be less crucial for profitability, though this does not diminish their broader relevance for societal and community outcomes which are beyond the scope of this work.

Digital creatives and digital engineers: entrepreneurial firms, institutional context, and the organization of innovation

Abstract The comparative capitalisms literature has developed an increasingly dynamic approach to conceptualizing capitalism variety, and has suggested mechanisms to explain shifts in institutional practices under the surface of formal stability of the institutional context. Less is known, however, about how new entrepreneurial firms engage with institutions to develop organizational arrangements needed to support their innovation activities. Such engagement with institutions can represent sources of heterogeneity within and across national institutional contexts, with incremental changes in practices resulting, in some instances, in major transformations in institutions over time. We draw on a study of fifty-three independent mobile games firms in the USA and Japan and the structures and processes used by these firms to develop innovative activities in their institutional context. Our research advances our understanding of organizational diversity and institutional change in two ways. First, our study identifies two new ‘variants’ of how entrepreneurial firms organize their innovation activities in their institutional context—digital creatives and digital engineers. Second, we characterize the mechanisms through which entrepreneurial firms engage and respond to institutions that support the establishment of these variants—defecting, intensifying, and positioning vis-à-vis large firms.

Understanding ‘dependency’ through the comparative capitalisms framework: conceptualisation of Greece as a dependent market economy

ABSTRACT This article relates to debates about dependency of countries in the global political economy. It conceptualises dependency by drawing on the concept of ‘mechanisms of dependency’, and builds a synergy with the Comparative Capitalisms (CC) literature (i.e. institutional and third-generation perspectives). The article expands the Varieties of Capitalism (VoC) framework by applying the established category of Dependent Market Economy to Greece. Building on financialisation as a mechanism of dependency, the article argues this locked Greece into reliance on external debt, dependent position within the Eurozone, as well as vulnerable situation after reforms demanded by the creditors were implemented. However, due to internal historical-structural issues with its capitalist model, Greece was unable to minimise the negative impact of financialised dependence, and is internally weakly prepared to escape from its peripheral status in the future if external dependence will be removed. The article argues that conceptual synergy between dependency theory and the CC literature is desirable in order to provide a more holistic account of interaction between external and internal factors in the context of dependent capitalist varieties.

Owner Identity, National Institutional Systems and Outward FDI Location: The Case of Chinese MNEs

We examine the relationship between majority owner identity, national institutional systems and Chinese MNEs' outward FDI location choices. We reason that particular owner types will prefer to locate in institutional systems with complementary institutional characteristics. Drawing upon the comparative capitalism literature that classifies institutional systems into nine configurations, we predict that owner identity significantly affects the selection of foreign investment destinations. Using a two-decade sample of 8,000 OFDI investment decisions, we explore the probabilities that particular owner types will select a specific institutional configuration as an OFDI destination. Our results show the likelihood of choosing a destination varies greatly across configurations. In particular, we find a strong correlation between owner identity and preferred institutional system in three types of enterprise. This study contributes to new understandings of how owner identity shapes the MNEs' ODFI destination and institutional system relationship.

Recovery, resilience and growth regimes under overlapping EU conditionalities: the case of Greece

This paper attempts to weigh into the debate on whether and if so, to what extent the policy response to the pandemic of the EU, most notably among others, the Recovery and Resilience Fund of the Next Generation EU, its conditionality, and the response of the ECB, marks a qualitative change rather than echoing the legacies of the previous crisis by looking into the case of Greece. According to the third-generation comparative capitalism literature, EU economic integration has been favouring export-led growth models over domestic-demand led ones through several channels, which included fiscal rules, financial support conditionality and monetary policy. During the pandemic, there have been apparent shifts in some of these channels. Greece has entered the pandemic with vulnerabilities from previous economic adjustment programmes it had to follow, large enough to warrant ‘enhanced surveillance’ by the European Commission, as well as challenging fiscal conditionality to secure some preferential treatment by its Eurozone partners/lenders of its public debt, to improve its fragile sustainability. This article assesses the risks that the Greek Recovery and Resilience Plan may face, given the economic, social and political legacies of and the lingering conditionality from the previous crisis. It thus illustrates how the implementation of the EU response to the pandemic in Greece is constrained by the legacy of the previous crisis despite shifts in policy channels through which the EU economic integration has been shaping national capitalisms.

Digital markets, competition regimes and models of capitalism: A comparative institutional analysis of European and US responses to Google

The comparative capitalism literature examined how institutions vary on a national or societal level and how these differences affect multinational companies’ strategies. Yet, little attention has been devoted to cross-national or regional differences in the governance of competition, especially in the context of digitalization of markets. The article seeks to fill this gap by looking at the case of Google. It traces the process of the stark US–EU disagreement over Google’s abuse of dominant position in digital markets, which resulted in one of the largest fines in the EU history. It is argued that the variation in the response to the company’s market and nonmarket strategies are traced back to differences between Ordoliberal and Chicago School ideas, which are embedded in the ‘competition regimes’ of European and US capitalist models. The article concludes by discussing the implications of these findings for varieties of capitalism frameworks.

The politics of comparing capitalisms

Research engaged in the comparison and analysis of different forms of capitalism has been a significant growth area of political economy scholarship in the 21st century. Yet this scholarship, referred to in the article as the Comparative Capitalisms literatures, has struggled to respond to the challenges posed by post-2007 developments in and across the global political economy. This article engages with the critique offered by a number of critical-geographical interventions: the variegated impacts and experiences of conditions of crisis highlight the fact that questions of variety and unevenness necessitate a considerably more holistic methodological approach to comparison than a singular ‘national state as container’ focus would allow for. While important, these ‘variegated capitalism’ interventions have not said enough about comparison as an intrinsically political research practice. Building on the work of especially Juliet Hooker, Reecia Orzeck and Heloise Weber, the article makes the case for (i) being explicit about what is analytically and politically at stake in the act of comparing, and (ii) putting analytical and political concerns on an equal footing. It further argues that a broadly conceived critical political economy approach, discussed in the final section, is best-placed to make the most of the potential of such an understanding of comparison. This makes it possible to deploy research strategies that juxtapose different constellations of crises, conflicts and contradictions in order to articulate critiques of capitalism and/or focus on social and political struggles taking place in, against and potentially beyond the ‘cases’ being considered.

That's How I Grew Up: CEO Origin and Corporate Pro-Social Behavior

More and more of today’s CEOs were born and raised abroad. How CEO origin affects firms, however, remains largely unexplored. This study investigates how a CEO’s country of origin affects firms’ CSR emphasis. Integrating imprinting theory and the comparative capitalism literature, we suggest that the national business system in a CEO’s country of origin shapes a CEO’s view on CSR and thus his or her firm’s CSR emphasis. We find that CEOs who were brought up in a business environment that resembles a coordinated market economy emphasize CSR more than CEOs originating from a liberal market economy. We further find that this relationship is accentuated when CEOs hold more discretion and when a CEO’s remuneration is incongruent with his or her home country imprint.

From Varieties of Capitalism to European Growth Models: towards a critical synthesis

The widespread belief that globalization would lead to the gradual convergence of advanced capitalist economies was challenged by the emergence of the Comparative Capitalism (CC) literature. Arguably the most influential approach within CC is the Varieties of Capitalism (VoC) model which argues that differences among advanced capitalist economies not only do not fade away but may be amplified due to the disparate comparative institutional advantages that various socioeconomic models may hold. VoC, nonetheless, was soon criticized -among others- for its binary ontological framework and heuristic shortcomings by the second generation CC. Contemporary writings within the third generation CC suggest a radical break from VoC as the focus should be, it is argued, on the demand, rather than the supply, side of the economy. This article posits that while the third generation CC has shifted attention to other institutional and policy fields, emphasizing essentially macroeconomic issues vis-à-vis economic policy reform, an epistemological rapprochement between the two main strands of CC could offer a more contextualized understanding of the different proposals put forward by the member states regarding the on-going Eurozone reform effort.

Varieties of Skills Profiles in Latin America: A Reassessment of the Hierarchical Model of Capitalism

AbstractResearch on the politics of skills formation in Latin America is severely underdeveloped. This article offers a novel characterisation of the supply of skills in the region or ‘skills supply profiles’, taking inspiration from the comparative capitalisms literature. We identify four configurations of skills supply profiles – universalising, dual academic-oriented, dual VET-oriented and exclusionary–and analyse their historical dynamics. By doing this, we challenge general assessments of Latin America's skills formation systems as pertaining to one overarching type. This sets the stage for a deeper understanding of the politics of skills in the region and their connection with different development alternatives.

East Asia’s retail revolution: Diffusion of organized retailing and varieties of market development in Korea and Taiwan

Global diffusion of organized retailing over the last several decades brought extensive worldwide standardization of retail formats and technologies. Such development, however, has not led to the success of the same set of retailers but to varied prominence of core players across markets. Few studies comparatively analyse local market environments to assess this variation, and those that do rarely look beyond local policy measures or idiosyncratic consumer tastes. Presenting a sociological institutionalist alternative and comparing Korea’s and Taiwan’s paths to organized retail development, this article highlights how local business groups relied on network-hierarchy logics to coordinate and control new businesses amid MNC entry and global diffusion of retailing. The resulting dynamics of competition and cooperation illustrate the significance of institutionalized market environments for MNC performance. The study contributes to the comparative capitalism literature by highlighting institutionally embedded strategic behaviours of organizations as crucial contributors to continued national economic diversity amid heightening globalization.

Institutional Systems for Equitable Wealth Creation: Replication and an Update of Judge et al. (2014)

ABSTRACTThis replication study was invited by the Editor in Chief of Management and Organization Review, Arie Y. Lewin. The original study by Judge, Fainshmidt, and Brown (2014) spanned the global financial crisis (2005–2010), and as such, this anomalous time period may not have been representative of most economies, or even the overall global economy. In this replication study we refine and extend Judge et al. (2014) which explored the provocative question – which form of capitalism works best in terms of ‘equitable wealth creation’? Similar to the earlier study, we find that there are multiple paths to macro-economic success. Notably, effective institutional configurations tend to combine high-quality regulatory institutions, effective skill development systems, and social cultures largely unaffected by corruption so there is some commonality amongst effective configurations. In contrast, ineffective institutional configurations tend to be relatively weak in one or several of these three critical sets of institutions. Importantly, we find some novel patterns emerging from the most recent data, including potentially new forms of capitalism associated with equitable wealth creation. In addition, we find that effective credit market institutions are more important, and collective bargaining institutions are less important than the original study suggested. We discuss implications for the comparative capitalism literature, policy makers, and the future of capitalism in the global economy.

Manufacturing discontent: National institutions, multinational firm strategies, and anti‐globalization backlash in advanced economies

AbstractResearch SummaryThere is mounting evidence of a widespread popular backlash against globalization in advanced economies, which can hurt multinational companies' (MNCs) interests. In this article, we argue that MNCs are both “culprits” and “victims” of backlash against globalization. Building on the comparative capitalism literature, we argue that national institutions influence the likelihood of a backlash by either encouraging MNCs to embrace a “labor arbitrage” strategy consisting in tapping into cheap labor markets overseas or preventing them from doing so. Where institutional constraints lead firms to adopt an “upgrading” route of using domestic workers, popular backlash is less likely. Such institutional factors help to explain variation in the likelihood of backlash across countries. We also discuss the strategic options available to firms facing backlash.Managerial SummaryMultinational companies are increasingly facing a backlash against globalization that, in some countries, may lead to policies that directly hurt their interests. Yet little is known about the link of this phenomenon with firm‐level strategies. In this article, we draw on comparative capitalism analysis to show that national institutions play a key role in determining the likelihood of backlash. They do so by inducing/discouraging MNCs to adopt certain strategies that expose non‐university‐educated workers to globalization pressures, influencing, in turn, the electorate's attitude toward globalization. We also present and discuss the strategic options available to firms facing backlash.

Comparative Capitalisms and Energy Transitions: Renewable Energy in the European Union

AbstractWe develop new theory pertaining to the institutional determinants of renewable energy usage across countries and over time. Building on key strands of the comparative capitalisms literature, we introduce new hypotheses relating to the 2009 Directive from the European Union (EU) on energy generation, as well as the impact of labour market regimes, national stock markets and merger and acquisition (M&A) activity, as well as ‘doing business’ conditions across countries. Based on renewable energy data from 27 EU countries over a period of 11 years, we provide new tests of the determinants of renewable energy usage. The data show strong and robust evidence of a causal impact of institutional determinants on renewable energy usage, consistent with a positive impact of the EU's 2009 Directive and other specific institutional factors. We discuss the implications for policy and practice.

Comparing Capitalisms: Debates, Controversies and Future Directions

Various strands of the comparative capitalisms (CC) literature agree that the advanced economies have liberalized in recent years, bringing with it rising income and wealth inequality and job insecurity; although these perspectives differ in important ways, there is much common ground between them to explain this heightened level of inequality and insecurity. Through reviewing contributions to three key CC perspectives since 2007/2008, we argue that they have tended to focus on developments in co-ordinated market economies, leading to a neglect of growing structural crises in liberal market economies, which have contributed to the UK and the USA entering uncharted socio-political waters. We extend recent work that emphasizes how variation between countries in labour-market institutions, different corporate forms and states’ fiscal policies help to explain income and wealth inequality to highlight future research agendas that seek to combine more systematically these institutional areas to explain social inequalities, workers’ experiences and socio-political crises within capitalist systems.

Strong Firms, Weak Banks: The Financial Consequences of Germany’s Export-Led Growth Model

The financial foundation of Germany’s manufacturing success, according to the comparative capitalism literature, is an ample supply of long-term capital, provided to firms by a three-pillar banking system and ‘patient’ domestic shareholders. This premise also informs the recent literature on growth models, which documents a shift towards a purely export-led growth model in Germany since the 1990s. We challenge this common assumption of continuity in the German financial system. Export-led growth, characterised by aggregate wage suppression and high corporate profits, has allowed non-financial corporations to increasingly finance investment out of retained earnings, thus lowering their dependence on external finance. This paper documents this trend and shows that business lending by banks has increasingly been constrained on the demand side, reducing the power – and relevance – of banks vis-à-vis German industry. The case study suggests a need for students of growth models to pay greater attention to the dynamic interaction between institutional sectors in general, and between the financial and the non-financial sectors in particular.

Capitalist Convergence? European (dis?)Integration and the Post-crash Restructuring of French and European Capitalisms

ABSTRACT This article critiques and builds upon first-wave (Höpner and Schäfer 2010. A new phase of European integration: organised capitalisms in post-Ricardian Europe. West European Politics, 33 (2), 344–368) and second-wave (Johnston and Regan 2018. Introduction: is the European Union capable of integrating diverse models of capitalism? New Political Economy, 23 (2), 145–159) European Integration and comparative capitalisms literatures which posit convergence towards a single model of capitalism or growth. It utilises the case study of France to explore the impact of European integration and disintegration on national models of capitalism in the post-crisis era. The article focuses on the impact of integrative and disintegrative dynamics on France’s ‘state-industry-finance nexus’, putting forward three core claims. First, French capitalism is not accurately captured by the above frameworks and remains better characterised by the concept of post-dirigisme. Indeed, comparative capitalisms debates must move beyond a simple bifurcation of capitalist types. Second, European integrative pressures must be viewed as fragmented, differentiating, mediated by domestic state actors and producing capitalist variegation and hybridisation. Countering functionalist tendencies within this literature, it shows how different conceptions of state-market relations crucially mediate the relationship between national capitalisms and European integration. Finally, in the context of Brexit, the dynamics of European disintegration – an issue not discussed so far in these debates – is contributing to a variegated and multi-directional process of capitalist restructuring in post-crisis France.

Economic systems in developing countries – A macro cluster approach

This study is an attempt to close a gap in the comparative capitalism literature. Studies in that field focus mostly on industrialized countries, discuss economic systems in developing regions separately, and do not provide evidence based on a worldwide sample. We use an established macroeconomic cluster approach to identify economic systems in a worldwide sample of 115 developing and industrialized countries. We use an innovative approach to correct for income-related differences that would otherwise distort the cluster results. The major results are (1) that two broad categories of economic systems exist in developing countries (liberal and coordinated), which mirrors the results for industrialized countries, and (2) that economic systems in developing countries are apparently determined by a mixture of colonial heritage—with the transfer of more liberal institutions in the case of British colonialization—and regional affiliation, which explain differences within continents and between continents.

Home-country measures to support outward foreign direct investment: variation and consequences

The state, especially in emerging economies, plays a key role in influencing firm behaviour, including outward foreign direct investment (OFDI). Often literature on the state’s influence on OFDI stresses direct state ownership. However, the state can influence OFDI in several ways, including policy support and subsidies; the literature has largely overlooked these effects. We build on key insights from the comparative capitalisms literature to put forward a series of propositions on how home-country measures – in both emerging and developed economies – to boost OFDI will influence, inter alia, the volume, location and mode of firms’ investments abroad. We thus contribute to the literature by showing how government policies across a wide range of countries influence an important aspect of firm behaviour that has economic, social and environmental implications.

Theorien von Kapitalismusvarianten und Wohlfahrtsregimen: Annahmen, Erfolge und die Notwendigkeit anderer Methoden

This article reviews assumptions, contributions, and impasses of the two most important theories of capitalist diversity: Esping-Andersen’s (1990) welfare regime and Hall and Soskice’s (2001) varieties of capitalism typology. It shows that each theory implies a multilevel structure that nests lower-level units in upper-level units. However, even though this multilevel structure is at the center of many debates in the comparative capitalism literature, it is rarely explicitly modeled, let alone tested. Identifying this as an important route forward for research on capitalist diversity, I will show how future research could employ multilevel models to answer some of the most important questions about capitalist diversity.