Economic theory is about coordination of decision making. Markets, corporate hierarchies and governments are seen as the most important governance mechanisms, and economics is about the proper role and scope of each mechanism. These governance mechanisms are mostly seen as functioning in isolation and according to their own respective rationales. On the other hand, discursive framing of decentralized decision making and the mixture of governance mechanisms as a result of direct interaction, joint decision making and negotiations between actors are beyond the theoretical perspective of most economics theories. However, some theories focus on informal coordination in networks, by means of social capital and through discursive interaction or what is in the context of this chapter called invisible handshakes in contrast to the visible hand. One such example is the economic theory of the governance of common pool resources.
Rasmus K. Storm and Klaus Nielsen
Stavros Ioannides and Klaus Nielsen
Boundaries, Interaction and Integration
Edited by Stavros Ioannides and Klaus Nielsen
Saul Estrin, Klaus E. Meyer, Bo B. Nielsen and Sabina Nielsen
National institutions shape the ability of civil society and minority shareholders to monitor and influence decision-makers in listed state owned enterprises (SOEs), and thereby their strategies of internationalization. We argue that the weaker are such controls, the more likely such decision makers pursue self-serving motives, and thus shy away from international investment. Listed SOEs’ strategies will thus be more similar to those of wholly privately owned enterprises (POEs) when these controls are more effective. Building on Williamson’s (2000) hierarchy of institutions, we examine how home country institutions exerting normative, regulatory, and governance-related controls affect the comparative internationalization levels of listed SOEs and POEs. Based on a matched sample of 153 majority state owned and 153 wholly privately owned listed firms from 40 different countries, we confirm that, when home country institutions enable effective control, the internationalization strategies of listed SOEs and POEs converge.