Coordinated Market Economies Research Articles

Short-term earnings mobility in the Canadian and German context: the role of cognitive skills

It is well-established that human capital contributes to unequal levels of earnings mobility. Individuals with higher levels of human capital, typically measured through education, earn more on average and are privy to greater levels of upward change over time. Nevertheless, other factors may have an incremental effect over education, namely cognitive ability and the skill demands of employment. To deepen insight into whether these aspects contribute to earnings mobility over a four-year period, the present study examines positional change in Canada and Germany—two contexts typified as examples of liberal and coordinated market economies. A series of descriptive indices and relative change models assess how different measures of human capital are associated with earnings mobility. The results indicate that, while individuals with higher cognitive skills experience greater earnings stability and upward mobility in both countries, there is only an incremental effect of skills on mobility in Germany once we account for educational credentials. The results also provide evidence on the role of skill demands for earnings mobility; in both countries, advanced skills at work are associated with greater short-term mobility, even while controlling for cognitive ability and other factors. Together the results showcase how longitudinal data containing detailed measures of human capital allow for deeper insight into what facilitates earnings mobility.

Family ownership and corporate social responsibility disclosure

ABSTRACT This study investigates the association between family ownership and the level of CSR disclosure, and to what extent country-level institutional differences and level of industry risk differences influence this association. Using a sample of firms domiciled across 14 European countries for the period from 2010 to 2017, the empirical results show that there is a negative association between family ownership and CSR disclosure. The study also indicates that both institutional environments and the industry risk have influence on the association between family ownership and CSR disclosure. In particular, family-owned firms domiciled in coordinated market economies demonstrate a higher degree of CSR disclosure in comparison to their counterparts operating in liberal market economies. Further, the results show various levels of associations between family ownership and CSR disclosure, as well as social and environmental disclosures, for family-owned firms domiciled in the sub-categories of CMEs. In terms of industry risk, family-owned firms operating in high-risk industries have higher scores of CSR compared to firms in low-risk industries. Moreover, family-owned firms that operate in high-risk industries have higher scores of environmental disclosure, compared to social disclosure, in order to increase their legitimacy on environmental issues.

Short-Term Health Policy Responses to Crisis and Uncertainty

AbstractThe onset of the economic crisis more than a decade ago posed extreme challenges to health care systems that may now be repeated with the COVID-19 pandemic. The resulting policies produced a wide range of (in some cases, even opposite) outcomes: increased or decreased public expenditures for health care. Curiously, however, countries that were considered particularly hard hit by the economic crisis showed different extremes of policy outcomes. Investigating these developments requires a dynamic view and identifying explanations for government action in one direction or the other. Using the lenses of several theoretical perspectives in public policy research, this article analyses the conditions under which public health expenditures changed in European Union member states after the financial crisis. Why did certain countries, at first sight similarly affected, show opposite outcomes? A Qualitative Comparative Analysis (QCA) confirms that left-wing governments and coordinated market economies, in combination and alone, tended to increase public health expenditures in the short term, whereas countries where neither of these conditions was present decreased public health expenditures.

Institutional settings and local embeddedness of European entrepreneurial families: an inter-regional comparison

ABSTRACT The interaction between institutional settings and Entrepreneurial Families (EFs) is two-fold. Extant literature has attempted to understand how institutional settings can affect Family Businesses’ embeddedness. Both perspectives are complementary and necessary to recognize that EFs are not only locally embedded in their territories, but they are also entrenched in institutions. Despite this, how different institutional settings impact on EFs’ local embeddedness remains unexplored. To fill this gap, we combine institutional theory and family business research to perform a qualitative investigation. Drawing on the Varieties of Capitalism institutional categorization, an exploratory study is carried out by including four European regions from countries that are positioned as a Coordinated Market Economy (CME) (Germany), a Liberal Market Economy (LME) (United Kingdom) and two cases of Mediterranean capitalist system (France and Spain). Forty-three semi-structured interviews were conducted across the regions and analysed through an open-coding process. Findings unveil that EFs’ local embeddedness is conditioned by different institutional settings in different ways, namely through codified mechanisms (CME and Spain) and through non-formalized mechanisms (LME and France). These are unfolded in 20 mechanisms, which contribute to territorial policies adjustments depending on the category of institutional setting where EFs are locally embedded.

German Labour Market Resilience in Times of Crisis: Revealing Coordination Mechanisms in the Social Market Economy

Most observers point to the importance of short-time work (Kurzarbeit) as one of the key explanations for Germany's stellar employment performance during the economic downturn in 2008–09. In this paper, I reveal previously unidentified causal mechanisms that have led to the widespread application of Kurzarbeit: the Christian Democrats’ embrace of the Social Market Economy, the formation of an ‘informal’ neo-corporatist alliance, the well-functioning communication channels within the public employment service and social partner organisations, and the ‘watch dog’ role of firm-level metal labour unions. This paper also reflects on the state of Germany's coordinated market economy despite the neoliberal discourse at European level, its labour market responses to the Corona pandemic of 2020, and the possible lessons for the Italian case.

From Quiet to Noisy Politics: Transformations of Swiss Business Elites’ Power

During most of the twentieth century, it was possible to consider Switzerland a coordinated market economy, characterized by dense interfirm networks and the strong role of business associations. Thanks to their cohesion and collective organization, in a context of quiet politics and informal institutions, business elites could largely self-regulate major socioeconomic issues in the shadow of politics. However, since the end of the twentieth century, Swiss business elites have undergone profound changes not only in their composition, but also in their coordinating capacity, their growing political divisions, and their connections to politics. This growing sociological and political fragmentation, combined with changes in the way of doing politics, through noisier and more formal politics, has weakened the instrumental power of Swiss business elites. To compensate for this loss of direct influence, business elites of the largest Swiss companies have developed new political strategies, relying on their growing structural power in a context of global and financial capitalism.

Employee Voice in the Unipolar World a Comparative Empirical Study of Trends in Finland and India

In this paper, the author questions the basic notion that the world over, the industrial relations systems (IRSs) are converging (towards the ‘liberal market economy’ configuration). The author argues that even when faced with a similar economic and business crisis, different economies can have divergent responses regarding the IRS. The dialectic between the strength of the existing systems based on social and cultural underpinning and the source of ownership of capital and power of accompanying business systems configuration determines primarily the outcome. This author proves by using union density data, a measure of employee voices, for Finland (from coordinated market economies), and India (from the liberal market economies). As analysis points out, in the same period, while facing similar economic crises, even though product market has undergone similar changes, union density for Finland has increased whereas India has come down.

Bureaucrats or Ideologues? EU Merger Control as Market‐centred Integration*

AbstractSince 1989, no major European merger has been able to go through without EU approval. The introduction of a centralized merger control procedure was another increase in the powers of the Commission's Directorate‐General for Competition (DG COMP). While some see it playing a neo‐mercantilist role in a positive European integration, others underline its neoliberal ideological roots. Through our analysis of all merger decisions made between 1990 and 2016 (6,161 cases), we instead find evidence for market‐centred negative integration: DG COMP is particularly harsh towards coordinated market economies and targets sectors that have high levels of state intervention, thus thwarting the rise of ‘European champions’. Our interviews with merger experts and the decision citation data further suggest that this market‐centred logic of enforcement is not necessarily driven by ideology, but by the silent logic of bureaucratic autonomy. We thus contribute to the debate on the EU as a supranational force of economic liberalization.

Left-Turn Ahead in the UK Economy: The Johnson Factor

The paper identifies the key features and specific nature of the economic strategy adopted by Boris Johnson’s conservative government. The record growth of the public sector net borrowing in the post-war era is viewed as the main risk factor to the strategy implementation. The author concludes that liberal market economy in the UK has been gradually morphing into a coordinated market economy. The paradigm shift expresses itself in the deviation from economic neoliberalism to the idea of ‘one-nation conservatism’ adapted to modern trends. In practice, this means reinforcement of the redistributive and regulatory functions of the state, as well as transition from the consumption-led to export-led growth model.

Responses to the Covid-19: A Political Economic Analysis

The Covid-19 pandemic posed serious threats to the national and international communities. Worldwide responses to combat its effects seemed weak and controversial. It led individual countries to exercise responses that varied depending upon their tradition, institutions, and leadership. What worked? And what did not? And why is still not comprehended. In this background, this study examines correlation between market economy frameworks such as liberal market economies (LMEs), coordinated market economies (CMEs), state-led market economies (SMEs)and Covid-19 caused deaths. More so, the death cases have been analyzed and interpreted based on published data from worldometer.com as well as national and institutional sources of 23 countries representing three distinct market economy frameworks. The data is juxtaposed with the acts of right-wing populism that determined decision making and institutional mobilization against Covid-19. The approach is dichotomized with a country's human development index and income inequality index (Gini Index). This study found that a country’s market economy framework has had a correlation with the Covid-19 caused deaths The impact, however, was associated with the acts of right-wing populism within different market economies. The 5 selected countries with LMEs have highest; another 5 selected countries with CMEs have higher and 13 selected countries with SMEs have lowest number of deaths. The findings also proves that rate of human development does not appear to be a valid framework for explaining differing death rates between the countries.

시스템 다이내믹스를 활용한 자유시장경제와 조정시장경제의 비교 분석

시스템 다이내믹스를 활용한 자유시장경제와 조정시장경제의 비교 분석

Varieties of Capitalism and labour market opportunities for the youth

In this study, we examine the extent to which socio-economic institutions shape young people’s perceptions of labour market opportunity structures and their employment attitudes (i.e. skills and retraining). Building on the varieties of capitalism approach, we expect young people (aged 18–35) in coordinated market economies (CMEs) with encompassing welfare states to regard firm- and industry-specific skills as more important than their peers in liberal market economies (LMEs). To assess this proposition, we draw on original survey data and compare young people’s employment attitudes in five European countries: the United Kingdom (UK), which represents a typical liberal market economy, and Austria, Denmark, Germany and Switzerland as representatives of coordinated market economies. To what extent do different training regimes in CMEs and LMEs shape individual attitudes towards skill formation? The empirical analysis shows that young people’s attitudes with regard to the specificity of skills and the willingness to undertake retraining differ systematically between CME and LME countries and supports our argument that the specific socio-economic institutions matter.

El impacto de las empresas de capital de riesgo en el empleo y la co-determinación: el caso de Alemania

Los estudios sobre los efectos de las empresas de capital riesgo o sociedades de inversión en los Estados Unidos han demostrado que el modelo de negocio a corto plazo y orientado al retorno de la inversión puede ejercer presión sobre las relaciones laborales entre empleadores y empleados. De igual manera, se supone que este es el caso de la economía de mercado coordinada en Alemania. En primer lugar, el artículo muestra para los años 2013 a 2018 el volumen de empleados afectados por adquisiciones de empresas de capital riesgo o sociedades de inversión en Alemania y las industrias en las que trabajan estos empleados. En segundo lugar, se examina hasta qué punto la co-determinación igualitaria, que la ley alemana exige a las empresas con más de 2000 empleados, es ignorada o evitada en mayor o menor medida por parte de dichas empresas en comparación con otras. En tercer lugar, se analiza el cambio en la actividad de los comités de empresa de aquellos casos que han sido asumidos por una sociedad de inversión. En general, se evidencia que las sociedades de inversión son más restrictivas a nivel de empresa en comparación con otros modelos y que se está volviendo más difícil para los comités de empresa representar adecuadamente los intereses de los empleados.

Unconstrained Capital? Multinational companies, structural power, and collective goods provision in dual VET

Abstract Collective goods provision, most prominent in coordinated market economies, depends on certain institutional conditions that constrain employer behavior and trigger cooperation. 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’. 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. 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. It must accordingly reshape collective goods provision around policies favored by business. In contrast, a location with more diverse comparative advantages is able to implement more compelling policy elements that punish uncooperative firms.

Exploring the explicitness, salience of ethics and transparency of messages in social reports: a cross-national longitudinal content analysis from an institutional perspective

PurposeThis study analyzed the explicitness, the salience of ethics and the transparency of messages in firms' social reports based on their significance to strategic corporate social responsibility (CSR) communication.Design/methodology/approachDrawing on institutional theory, this content analysis investigated 750 social reports from 125 firms for a ten-year period in liberal market economies (LMEs: US, UK), coordinated market economies (CMEs: Germany, Japan) and state-led market economies (SLMEs: France, South Korea).FindingsFirst, firms in CMEs showed the highest level of transparency, and in all market economies, an overall trend of increase in the level of transparency was found. Second, firms in SLMEs communicated their CSR activities least explicitly. Third, firms in CMEs showed the lowest salience of ethics.Originality/valueUseful theoretical as well as practical implications are provided in relation to the institutional perspective to CSR, and cross-national CSR communication.

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.

Performance Management and MNEs: The Impact of Different Economies

We investigate whether certain performance management practices are used more in some national contexts and amongst MNEs rather than in other national contexts or in indigenous companies. We use data from Europe collected as part of the comparative Cranet survey data of HRM practice to focus on the use of performance appraisal, adopting the lens of comparative capitalisms. We find that, in comparison to firms operating in the Anglo-Saxon liberal market economies, performance appraisal (and, notably, systems linking pay to rewards) is considerably less used in the various categories of coordinated market economies found in continental Europe. This may be a reflection of systemic restraints on effective people management, although a look at national productivity rates might suggest otherwise. As expected, foreign owned MNEs tend to use performance appraisal more than organizations in our sample; this may be a reflection of either country of origin pressures (with most originating in LMEs). However, even in the latter, MNEs were likely to make usage of more comprehensive forms of performance management than their domestic counterparts, infusing elements that went beyond rewards, to encompass training and development and career planning. This may either reflect the superior resources MNEs may have at their disposal and/or an emerging best practice model. We found little no tendency for firms worldwide to default to the LME model indicating the continued relevance of national institutional recipes.

The German variety of grocery retailing: A historical institutionalist analysis of a non-core industry

This article undertakes a historical institutionalist analysis of the German grocery retail industry. It shows that the institutions that shape this non-core industry are not just modifications of those that shape German export-oriented manufacturing core industries. Retail institutions are fundamentally different, and many of them do not promote coordinated relationships of firms. This challenges the assumption of comparative capitalisms research that all-encompassing national institutions characterize Germany as a coordinated market economy. Further, retail institutions have developed their specific characteristics not just over the last decades, as theories of dualization might suggest. Rather, they are frequently rooted in a German petite bourgeoisie or Mittelstand tradition reaching back to the 19th century. A second critical period was the 1960s and early 1970s, when political struggles that resulted from the retail revolution further transformed retail institutions. Based on the literature from various academic disciplines and on original empirical research, the article reconstructs the historical development of the whole set of institutions that has shaped a specific German grocery retail structure dominated by retailers’ cooperatives and hard discount chains. The analysis of an important non-core industry also intends to contribute to a fuller understanding of the institutions that frame the German economy as a whole, including conceivable complementarities between core and non-core sector institutions.

The Effect of Varieties of Capitalism on the Relationship of Institutional Gearing and Economic Growth

The ways the firm solves coordination problems with the different stakeholders (or the varieties of capitalism of nations) affect economic performance. Institutional gearing is one of the main determinants of economic growth. Nevertheless, there are no studies that analyse the effect of varieties of capitalism on the relationship of institutional gearing and economic growth. The objective of the paper is to estimate the effect of the variety of capitalism on the relationship between the institutional gearing index and other macroeconomic control variables on the GDP per capita in a group of developed and developing countries. To do that 3 panel data models were estimated: one with fixed effects and two with random effects, for 31 countries for the period 2011-2015. We used 16 Coordinated Market Economies and Liberal Market Economies and 15 Hierarchical Market Economies. The results showed the varieties of capitalism affect the relationship between institutional gearing and economic growth. In the Coordinated Market Economies and Liberal Market Economies this effect is higher than in Hierarchical Market Economies. Governments of Hierarchical Market Economies should not only apply public policies to build functional institutions, but also encourage the positive complementarities among them.

Institutions and the gender wage gap: How production and welfare regime moderates the effect of family policy

The aim of this study was to determine whether the effects of work and family reconciliation policy on the gender wage gap are moderated by institutional contexts of production and welfare regime. Using time‐series analysis for 13 countries from 1981 to 2015, the study revealed a strong association between childcare and a lower gender wage gap in the Coordinated Market Economies (CMEs)/social democratic welfare states but not in Liberal Market Economies (LMEs)/liberal welfare states. The study also found that the impact of leave generosity on the gender wage gap in CMEs/social democratic welfare states is less salient than in CMEs/continental welfare states. This study highlights the extent to which family policy affects the gender wage gap hinges on how each country organises its market coordination and welfare institutions and pushes the current literature forward to a question of ‘what kinds of’ family policy matters in ‘which’ production and welfare regimes.