Problems of Growth and Stability
Edited by Pier Carlo Padoan, Paul A. Brenton and Gavin Boyd
Chapter 3: Analytical perspectives on the varieties of capitalism and structural interdependencies: implications for multinational business finance
Alain Verbeke INTRODUCTION This chapter briefly reviews a number of recent insights into the ‘varieties of capitalism’ which are allegedly found to subsist (and to prosper) in the new global economy. The modern political-economy analysis of these varieties of capitalism argues that national institutional differences will not disappear in the long run, and may even greatly contribute to the national comparative advantage of specific industries. When applied to issues of micro-level governance, and especially the choice of financial structure, important differences can indeed be identified among firms from different countries, very much in line with the politicaleconomy prediction that there is no single optimal governance structure or financial structure that should be prescribed to firms across countries. Each nation is characterized by a specific configuration of economic actors pursuing particular interests and characterized by historically grown relationships among them. However, this political-economy analysis appears to miss the important point that multinational enterprises (MNEs) now play a key role in the global economy and in the creation of structural interdependencies among countries. The presence of triad-based competition in many industries, with rivals from North America, the European Union and Japan, at a superficial level seems to demonstrate that no single variety of capitalism is able to prevail in global competition, thereby confirming the above political-economy prediction. However, this observation does not imply that the presence of several varieties of capitalism is efficient or contributes to a better functioning of MNEs or national economies. Rather, the presence of such varieties poses a...
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