Comparative country studies - IB
Table of contents
Article 1:...................................................................................................................................................................3
Varieties of Capitalism and institutional comparative advantage: A test and reinterpretation (VOC).........3
LMES.....................................................................................................................................................................4
Critics....................................................................................................................................................................4
Article 2 NBS...........................................................................................................................................................4
Critics...................................................................................................................................................................5
Article 3: Comparing capitalisms: understanding institutional diversity and its implications for International
Business....................................................................................................................................................................7
Article 4: Mapping the business systems of 61 major economies: a taxonomy and implications for varieties
of capitalism and business systems research......................................................................................................11
Article 5: The construct of institutional distance through the lens of different institutional perspectives:
Review, analysis, and recommendations.............................................................................................................12
Article 6: National institutional systems, foreign ownership and firm performance: The case of understudied
countries.................................................................................................................................................................13
Article 7 :From typology to taxonomy: a configurational analysis of national business systems and their
explanatory power (Hotho, 2014).........................................................................................................................14
Article 8 : The impact of the home country on internationalization....................................................................16
Article 5: The construct of institutional distance through the lens of different institutional perspectives:
Review, analysis, and recommendations..............................................................................................................19
Article 9...................................................................................................................................................................19
The Uppsala internationalization process model revisited: From liability of foreignness to liability of
outsidership............................................................................................................................................................19
1977 model.........................................................................................................................................................19
Liability of insidership........................................................................................................................................20
Liability of outsidership......................................................................................................................................20
Knowledge and learning....................................................................................................................................20
Opportunity development..................................................................................................................................20
2009 Model........................................................................................................................................................21
Article 10: Clarifying the relationships between institutions and global strategy..............................................22
Institutions, institutional quality, and institutional differences.........................................................................22
Theories of institutions and firm behavior.........................................................................................................22
, Mechanisms in the impact of institutions on firm strategies............................................................................24
Direct mechanisms in the impact of firm strategies on institutions..................................................................24
Indirect mechanisms in the impact of firm strategies on institutions...............................................................25
Article 11: The interrelationships among informal institutions, formal institutions and inward Foreign Direct
Investment..............................................................................................................................................................26
Article 12: Multinational enterprises’ risk mitigation strategies in emerging markets: A political coalition
perspective.............................................................................................................................................................28
, Article 1: Varieties of Capitalism and institutional comparative advantage: A test
and reinterpretation (VOC)
Abstract
How do national-level institutions relate to national comparative advantages?
Comparative advantages in industries with radical innovations emerge in specific
configurations mixing coordinated and liberal institutional features. Institutional
comparative advantage in industries with radical innovation may thus be based on the
“beneficial constraints” of opposing institutional logics rather than on the on the self-
reinforcing institutional coherence envisioned in much of the Varieties of Capitalism
literature.
Coordinated market economies may have comparative advantages in industries with
incremental innovation, as envisioned in the Varieties of Capitalism literature.
Varieties Of Capitalism (VOC) typology attempts to explain how economic activity is
organized between capital, labor and management within advanced economies.
2 distinct forms of capitalism:
LMEs > liberal market mechanisms > US
The labor market is flexible, and coordination of labor is rare
less competitive in comparison to CMEs
The prototypical LME, such as the US, features a market-driven financial system, flexible use
of external labor markets, generalist education and training systems, low levels of networks
and alliances among firms, and management-driven, top-down decision-making structures
inside firms.
CMEs > non-market relationships
The classic CME, such as Germany around 1995, has a bank-led financial system providing
patient capital, stronger internal labor markets based on employment protection, skills
formation systems conducive to the development of specialized skills, high levels of networks
and alliances among firms, and consensual decision-making inside firms bringing together
management and labor.
These institutional differences encourage firms to invest in and utilize transferable assets to a
greater extent in LMEs, where institutions do not bind economic actors to long-term
commitments but support their ‘‘keeping options open’’ to using the external market.
By contrast, the use of relational assets in CMEs implies investments whose value is specific
to the continuation of long- term relationships among company stakeholders. Such
investments require different sorts of institutional support – such as protection of investments
in firm-specific human capital and contracting arrangements, or mechanisms to govern
collective action problems (e.g., free rider problems) and support wider patterns of
cooperation across a network or industry.
Complementarities exist where features of institutional structures reinforce each other by
mutually generating increasing returns. Meanwhile, coherence is present where institutions
Table of contents
Article 1:...................................................................................................................................................................3
Varieties of Capitalism and institutional comparative advantage: A test and reinterpretation (VOC).........3
LMES.....................................................................................................................................................................4
Critics....................................................................................................................................................................4
Article 2 NBS...........................................................................................................................................................4
Critics...................................................................................................................................................................5
Article 3: Comparing capitalisms: understanding institutional diversity and its implications for International
Business....................................................................................................................................................................7
Article 4: Mapping the business systems of 61 major economies: a taxonomy and implications for varieties
of capitalism and business systems research......................................................................................................11
Article 5: The construct of institutional distance through the lens of different institutional perspectives:
Review, analysis, and recommendations.............................................................................................................12
Article 6: National institutional systems, foreign ownership and firm performance: The case of understudied
countries.................................................................................................................................................................13
Article 7 :From typology to taxonomy: a configurational analysis of national business systems and their
explanatory power (Hotho, 2014).........................................................................................................................14
Article 8 : The impact of the home country on internationalization....................................................................16
Article 5: The construct of institutional distance through the lens of different institutional perspectives:
Review, analysis, and recommendations..............................................................................................................19
Article 9...................................................................................................................................................................19
The Uppsala internationalization process model revisited: From liability of foreignness to liability of
outsidership............................................................................................................................................................19
1977 model.........................................................................................................................................................19
Liability of insidership........................................................................................................................................20
Liability of outsidership......................................................................................................................................20
Knowledge and learning....................................................................................................................................20
Opportunity development..................................................................................................................................20
2009 Model........................................................................................................................................................21
Article 10: Clarifying the relationships between institutions and global strategy..............................................22
Institutions, institutional quality, and institutional differences.........................................................................22
Theories of institutions and firm behavior.........................................................................................................22
, Mechanisms in the impact of institutions on firm strategies............................................................................24
Direct mechanisms in the impact of firm strategies on institutions..................................................................24
Indirect mechanisms in the impact of firm strategies on institutions...............................................................25
Article 11: The interrelationships among informal institutions, formal institutions and inward Foreign Direct
Investment..............................................................................................................................................................26
Article 12: Multinational enterprises’ risk mitigation strategies in emerging markets: A political coalition
perspective.............................................................................................................................................................28
, Article 1: Varieties of Capitalism and institutional comparative advantage: A test
and reinterpretation (VOC)
Abstract
How do national-level institutions relate to national comparative advantages?
Comparative advantages in industries with radical innovations emerge in specific
configurations mixing coordinated and liberal institutional features. Institutional
comparative advantage in industries with radical innovation may thus be based on the
“beneficial constraints” of opposing institutional logics rather than on the on the self-
reinforcing institutional coherence envisioned in much of the Varieties of Capitalism
literature.
Coordinated market economies may have comparative advantages in industries with
incremental innovation, as envisioned in the Varieties of Capitalism literature.
Varieties Of Capitalism (VOC) typology attempts to explain how economic activity is
organized between capital, labor and management within advanced economies.
2 distinct forms of capitalism:
LMEs > liberal market mechanisms > US
The labor market is flexible, and coordination of labor is rare
less competitive in comparison to CMEs
The prototypical LME, such as the US, features a market-driven financial system, flexible use
of external labor markets, generalist education and training systems, low levels of networks
and alliances among firms, and management-driven, top-down decision-making structures
inside firms.
CMEs > non-market relationships
The classic CME, such as Germany around 1995, has a bank-led financial system providing
patient capital, stronger internal labor markets based on employment protection, skills
formation systems conducive to the development of specialized skills, high levels of networks
and alliances among firms, and consensual decision-making inside firms bringing together
management and labor.
These institutional differences encourage firms to invest in and utilize transferable assets to a
greater extent in LMEs, where institutions do not bind economic actors to long-term
commitments but support their ‘‘keeping options open’’ to using the external market.
By contrast, the use of relational assets in CMEs implies investments whose value is specific
to the continuation of long- term relationships among company stakeholders. Such
investments require different sorts of institutional support – such as protection of investments
in firm-specific human capital and contracting arrangements, or mechanisms to govern
collective action problems (e.g., free rider problems) and support wider patterns of
cooperation across a network or industry.
Complementarities exist where features of institutional structures reinforce each other by
mutually generating increasing returns. Meanwhile, coherence is present where institutions
