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Glenn Morgan and Heike Doering

The Varieties of Capitalism approach to employment relationships examines how institutional context impacts on firms’ strategies and structures. It identifies key institutions and institutional complementarities that shape firm behaviour including, as is the focus here, the production and regulation of labour. This chapter outlines how different varieties of capital differentially invest in and treat labour, with implications for the relationships between labour, its deployment within the production process, the role of skills, labour mobility and negotiation of wages and employment benefits, and different national trajectories of economic development. The chapter concludes by outlining scope for further development and emphasizing the approach as a theory of incentives and institutional complementarities, rather than a descriptive tool.