Varieties Of Capitalism Literature Research Articles

Globalization of Arms Production And Hierarchical Market Economies: Explaining the Transformation of the South Korean Defense Industry

The global arms industry has experienced a major transformation in the post-Cold War era, with production becoming increasingly transnational and larger in scale. While many scholars and policymakers predicted the widespread adoption of market-enhancing reforms aimed at increasing domestic competition and attracting FDI, globalization of arms production has not led to a convergence of national defense industries into a liberal- market model. Drawing on the varieties of capitalism (VoC) literature, recent scholarship has demonstrated how an interdependent web of economic institutions has shaped each country's response in varied ways. This paper builds on the VoC literature and argues that the hierarchical market economy (HME) as a distinct variety serves as a better model for understanding the trajectory of defense industries in many second-tier producers that do not fit the existing categories of VoC. We conduct an in-depth case study of South Korea's defense-industry reform initiated in 2008 and the subsequent threefold increase in its arms exports. We show that the trajectory of South Korea's defense-industry reform can be seen as the result of an HME's attempt to adapt to the globalization of arms production in ways that preserve its distinct comparative advantage. As the HME model has broad applicability for many countries in Asia and Latin America, our findings have important implications for future developments in the global arms industry.

Reversing the Bamboo Network: Chinese capital, geopolitics, and institutions in Southeast Asia

ABSTRACT This study applies a comparative political economy approach to institutional theory by considering institutional convergence and geopolitics as determinants of Chinese outward foreign direct investment (OFDI). Using country-level data for a sample of Asian countries, including Bamboo Network countries or countries with prominent overseas Chinese business networks in Southeast Asia, and other countries identified in the Varieties of Capitalism literature, the dynamic panel analysis from 2007 to 2019 finds that Chinese OFDI is significantly positively affected by the interaction between greater formal institutional distance from China and a similar state-backed institutional configuration. Conversely, active territorial disputes with China and formal arbitral proceedings against this country have significant and negative effects. This study finds that Chinese OFDI in general and specifically the reversal of the Bamboo Network, or the flowing back of Chinese capital into Southeast Asian economies that initially invested in China’s rise and integration into the global economy, are conditioned upon geopolitical tensions and convergence in terms of institutional configuration but not institutional distance.

Guerilla capitalism and the platform economy: Governing Uber in China, Taiwan, and Hong Kong

ABSTRACT Platforms play an increasingly important role in organizing our economic and political systems globally. Drawing on the varieties of capitalism (VoC) approach and the notion of regulatory entrepreneurship, this article introduces the concept of guerilla capitalism to describe an emerging politically led and economic operative logic of platforms: their profitability relies on the active exploitation of legal gray zones and their ability to harness their network power to openly contest and reshape legislation politically. Through a comparative study of Uber’s operation in China, Taiwan, and Hong Kong, this article demonstrates that, despite the fact that Uber’s guerilla growth strategy remained strong, its political playbooks resulted in diverse dynamics within different regulatory regimes. The article further explains why its playbook was relatively more effective in the democratic context because the firm could successfully mobilize the fictitious voice of the citizens to legitimize its business. Through these three case studies, this article contributes to the existing literature on platform studies by introducing novel uses of political economy. It also enriches the VoC and platform economy literature by studying the behaviors of platforms in East Asian contexts which exist under separate and specific political regimes.

The emergence of regulatory capitalism in Africa

As part of conceptualizing a form of capitalism specific to the African continent, this paper offers an institutional study of the development of regulatory institutions in Africa, suggested by and suggestive to current theoretical accounts of regulation and its relationship to capitalism. Recent scholarship has sketched a vision of regulatory capitalism that has much traction in the now-emerged discipline of governance but less in that of economics. That vision depends upon functioning regulatory institutions and effective enforcement strategies. Drawing from both disciplines and from the varieties of capitalism literature, this paper examines how and to what extent the African continent can be characterized as a regulatory region. One of the processes by which Africa has become a regulatory region is the founding of public regulatory agencies. Another is the growth and spread of firms and practices associated with regulatory capitalism. Reflective of these processes, attention at both national and regional levels within Africa to the establishment and operation of competition regimes, to complementary regulatory regimes (with attention here to the telecommunications and public procurement fields), and to the rise and significance of African regional economic communities provides evidence for envisioning Africa as a regulatory region. This evidence suggests that the exploration of a distinctively African variety of regulatory capitalism is warranted.

Entrepreneurial Engagement and Performance: A Meta-Study on the Effect of Institutional Systems

Building on the varieties of capitalism literature, we examine the extent to which the different modes of coordination that underly institutional configurations influence value appropriation from e...

Collaboration in innovation: An empirical test of Varieties of Capitalism

Do country-level institutions drive firm-level collaboration in invention? Hall and Soskice's (2001) Varieties of Capitalism (VoC) contends that the institutional configurations of modern capitalist economies push organizations towards country-specific behavioral patterns in terms of collaboration frequency and duration. In this article, we first extract these claims from the VoC literature and then test them in the empirical setting of collaboration in invention. Towards this end, we construct an original dataset of patents and employ a novel metric of historical collaboration stickiness. We find strong support in favor of Hall and Soskice's prediction that inter-firm collaboration will be more common within coordinated-market economies. However, the VoC claim that organizations within coordinated-market economies will form more durable collaborative relationships than those formed within liberal-market economies does not hold up to empirical scrutiny.

Working-time regulation, long hours working, overemployment and mental health

Using nationally representative panel data from Australia and Germany, this article investigates the relationships between working-time regulation, long working hours, overemployment and mental health, as measured by the Mental Component Summary score from the 12-item Short Form Health Survey (SF-12). Fixed effects and dynamic linear models are estimated, which, together with the longitudinal nature of the data, enable person-specific traits that are time invariant to be controlled for. Drawing on the Varieties of Capitalism literature it is hypothesized that the system of collective regulation of working time in Germany will be more effective in limiting the incidence of overemployment than the more individualized system of regulation in Australia so that the prevalence of working time related mental ill health is lower. Results do not support this hypothesis. Overemployment is similarly common in both countries and is also associated with lower levels of mental health in both countries.

Do trustful labor–management relations enhance innovation? Evidence from German WSI data

Analyzing a sample of German firms, our Probit analysis shows that conflictual Anglo-Saxon type labor–management relationships are negatively related to the probability of performing R&D and to introduce innovations. We add to the Varieties of Capitalism literature a number of arguments of why cooperative Rhineland labor relations are superior in handling the ‘routine’ innovation model in knowledge-intensive industries. Notably if innovative competences are based on the stepwise accumulation over long periods of bits and pieces of knowledge for the continuous improvement of products, processes or systems, cooperative Rhineland labor relations appear to be superior to conflictual Anglo-Saxon labor relations.

The diversity of labor market institutions and entrepreneurship

Abstract Substantial literature demonstrates that flexible labor market institutions promote entrepreneurial activity. We re-evaluate this finding by considering the complementarity between institutions as advocated by the varieties of capitalism literature. We study the relevance of labor market regulations, wage-setting institutions and social security, and their complementarity for different types of entrepreneurial activity in 19 European countries and the USA. Two findings stand out. First, the four distinct bundles of labor market institutions characterizing Europe support different forms of entrepreneurial activity, and that innovative entrepreneurial activity also exists in less-flexible and -regulated labor market arrangements. Second, the relationships between single labor market institutions and entrepreneurial activity vary across the four institutional constellations. Therefore, to promote entrepreneurship in Europe, there is a need for tailored reform strategies that consider the diversity of the institutional constellations.

Activist, Entrepreneur, or Caretaker? Negotiating Varieties of Women in Development

Most studies examining gender and development programs in international nongovernmental organizations (INGOs) consider how these organizations construct global policy agendas, or how such policies are implemented in local contexts. However, INGOs originate in specific countries. Drawing on the varieties of capitalism literature, this article analyzes the impact of “national gender imaginaries” on gender and development programs implemented by INGOs in Cambodia. Based on 43 in-depth interviews, I argue that INGOs from Scandinavia, the United States, and South Korea, informed by different gender imaginaries, pursue different ways of promoting women in development. Local Cambodian nongovernmental organizations (NGOs), aware of this variation in national models among INGOs, employ distinct strategies to appeal to donors while adapting the models to the Cambodian context.

Unexpected corporate outcomes from hedge fund activism in Japan

AbstractHedge fund activism has been identified in the USA as a driver of enduring corporate governance change and market perception. We investigate this claim in an empirical study to see whether activism produced similar results in Japan in four representative areas: management effectiveness, managerial decisions, labour management and market perception. Experience from the USA would predict positive changes at Japanese target companies in these four areas. However, analysis of financial data shows that no enduring changes were apparent in the first three areas, and that market perception was consistently unfavourable. Our findings demonstrate that the same pressures need not produce the same results in different markets. Moreover, while the effects of the global financial crisis should not be ignored, we conclude that the country-level differences in corporate governance identified in the varieties of capitalism literature are robust, at least in the short term.

Unexpected Corporate Outcomes from Hedge Fund Activism in Japan

Hedge fund activism has been identified in the USA as a driver of enduring corporate governance change and market perception. We investigate this claim in an empirical study to see whether activism produced similar results in Japan in four representative areas: management effectiveness, managerial decisions, labour management, and market perception. Experience from the USA would predict positive changes at Japanese target companies in these four areas. However, analysis of financial data shows that no enduring changes were apparent in the first three areas, and that market perception was consistently unfavourable. Our findings demonstrate that the same pressures need not produce the same results in different markets. Moreover, while the effects of the global financial crisis should not be ignored, we conclude that the country-level differences in corporate governance identified in the varieties of capitalism literature are robust, at least in the short term.

Economic outcomes in New Zealand: a varieties of capitalism lens

ABSTRACTThis article situates New Zealand in the Varieties of Capitalism literature and then uses this theoretical framework to provide a critical analysis of the country’s recent economic under-performance. It argues that while New Zealand is rightly assumed to reflect a near pure example of a free-market Liberal Market Economy, its historical trajectory has been rather more mixed. This has led some analysts to assume that a shift from a ‘Coordinated’ to a ‘Liberal’ Market Economy has occurred, yet the state played a much heavier-handed role in creating and overseeing such apparently cooperative mechanisms than is the case in true coordinated market economies. When the state removed such support structures as the results of pro-market reforms in the 1980s and 1990s, there was a lack of ‘coordination’ altogether in the New Zealand political economy. Businesses, either on a collective or an individual basis, did not step in to perform functions previously delivered by the state. This analysis is applied specifically to the fields of skills formation, or vocational education and training, and research and development, as illustrative examples of this broader critical line of argument.

Varieties of risk regulation in Europe: coordination, complementarity and occupational safety in capitalist welfare states

Abstract This article tests the extent to which the organization and stringency of occupational health and safety regulation complements the dominant mode of coordination in the political economy. While the UK explicitly sanctions risk-cost-benefit trade-offs, other European countries mandate ambitious safety goals. That contrast appears to reflect cleavages identified in the Varieties of Capitalism literature, which suggests worker protection regimes are stronger in coordinated market economies than in liberal market economies. Our analysis of Germany, France, UK and the Netherlands, shows that the varied organization of their regulatory regimes is explained through a three-way complementarity with their welfare systems and modes of coordination. However, despite varied headline goals, we find no systematic differences in the stringency of those countries’ regulatory protections insofar as they all make trade-offs on safety. Instead, the explicitness, rationalizations and logics of trade-offs vary according to each country’s legal system, state tradition and coupling between regulation and welfare system.

Complexity in Employment Life Courses in Europe in the Twentieth Century—Large Cross-National Differences but Little Change across Birth Cohorts

Whether employment life courses have become more unstable and complex across the twentieth century has been a prominent topic in academic and public debate. Yet, empirical evidence on longer-term employment trajectories and how they changed across cohorts beyond single-country analyses is sparse. In this paper, we propose a new methodological approach that includes measures developed in sequence analysis to summarize complexity in employment trajectories in a cross-classified multilevel model by cohort and country. This allows us to quantify and describe change in the complexity of employment trajectories across cohorts relative to variation across fourteen European countries. We use SHARELIFE data to analyze employment trajectories from age 15 to 45 for men and women born between 1918 and 1963. For these birth cohorts, findings show that change across cohorts is negligibly small, compared with a sizeable variation of complexity in employment trajectories across countries. Further, based on theoretical assumptions derived from the varieties of capitalism literature, we demonstrate that the cross-national variation in employment complexity can, in part, be accounted for by employment protection legislation and unemployment protection measured as wage replacement rates. We conclude that in accordance with other studies, our findings contradict the commonly held belief that employment trajectories have become much more unstable across the second half of the twentieth century. More generally, the proposed methodological approach is also promising to analyze complexity in life course trajectories in other areas of application.

The Forces Shaping National Response(s) to Global Educational Regulatory Initiatives: The Case for Germany and Ontario

This article argues that the stance toward global regulatory initiatives is influenced by the extent to which these regulatory initiatives threaten the comparative institutional advantages of the national economy. The cases through which this proposition is examined are the showpieces of Germany and Ontario: their system of vocational education and training. The article draws on the Varieties of Capitalism literature to explore the factors that implicated the most into the educational reforms introduced in Germany in the context of the Bologna Process. In the case of Ontario, the paper used educational reforms in the context of two OECD reports, Learning for Job and A Skills beyond School. The paper concludes that comparative institutional advantage and the institutional complementarity sustaining it explain the different trajectories countries take in their response to global pressures.

Disentangling patterns of economic, technological and innovative specialization of Western economies: An assessment of the Varieties-of-Capitalism theory on comparative institutional advantages

It is one of the central arguments of the Varieties-of-Capitalism (VoC) literature that national institutions determine comparative advantage. While Liberal Market Economies (LMEs) are said to offer comparative institutional advantages to firms that specialize in high-tech sectors based on radical innovation, Coordinated Market Economies (CMEs) offer advantages to firms specializing in medium-high-tech sectors characterized by incremental innovation. Several studies have tested these claims and arrived at contradictory results about specialization in line with institutional advantages. We argue that undifferentiated conceptualizations of the notion of specialization contribute to these inconclusive results. Based on the insights of the innovation literature on comparative advantage, we therefore disentangle the concepts of 1) economic specialization, 2) technological specialization, and 3) innovative specialization. Our analyses of panel data on exports and patents show that the VoC theory is rather weak in explaining patterns of economic specialization but can account for technological specialization. Furthermore, the VoC literature can hardly explain patterns of innovative specialization.

Overseas state outsiders as new sources of patient capital: Government policies to welcome Sovereign Wealth Fund investment in France and Germany

Strong debates in the varieties of capitalism literature as to whether financial liberalization and internationalization undermine ‘insider’ corporate governance systems based on patient capital in coordinated and state-led market economies have focused on ‘impatient’ overseas private capital. However, cross-border state investment has also grown. We examine government policies towards a prominent type of state investment—equity purchases by sovereign wealth funds (SWFs). We argue that policymakers in ‘insider’ corporate governance systems can see such investment as an attractive international source of patient capital to offset declines in traditional sources of patient capital. We compare Germany and France and show that policymakers actively welcome SWF investment. Policy is driven by coalitions of ‘insiders’ of the managements of large industrial firms and governments who seek passive patient capital and beneficial relationships with overseas investors. Thus, financial liberalization and internationalization can allow new sources of patient capital through overseas state investors.

Patient capital in entrepreneurial finance: a reassessment of the role of business angel investors

The debate on patient capital, particularly in the varieties of capitalism literature, concentrates on institutions and public markets. In this paper we take an entrepreneurial finance perspective to examine the investment attitudes and behaviours of business angels. These represent the biggest source of external risk capital for new and young growing companies and therefore play a critical role in entrepreneurial ecosystems. Drawing on both a detailed review of previous research on business angel investment time horizons, investor engagement and exit behaviour and new survey evidence we conclude that only a minority of angels could be defined as being exit-centric investors. It can be concluded that the vast majority of angels are patient investors in terms of investment intentions, engagement and exit behaviour, largely by default rather than intent. Most do not consider the exit at the investment appraisal stage nor the need for patience.

Skills and Inequality: Partisan Politics and the Political Economy of Education Reforms in Western Welfare StatesBusemeyer, MariusCambridge, Cambridge University Press (2015), 309 p., ISBN 978‐1‐107‐06293‐1

Skills and Inequality: Partisan Politics and the Political Economy of Education Reforms in Western Welfare StatesBusemeyer, MariusCambridge, Cambridge University Press (2015), 309 p., ISBN 978‐1‐107‐06293‐1