In search of developmental capitalism institutions:

How can we explain that some emerging economies grow faster than others? What explains the sustainability of their growth? Not all types of capitalism in emerging markets contribute equally to sustainable growth rates that undergird development. Comparative capitalism research on European economies temporary growth models aims to more properly grasp change in the varieties of capitalism approach. Adoption of the growth models in emerging markets capitalism research requires attention to integration into the global economy and to political coalitions, and the need to deal with the methodological challenges, given high labor market informality and political instability. This article seeks to make sense of changes in the components of successive growth models throughout a path-dependent capitalist variety, expand the growth model analytical framework by testing elements alongside demand (and supply) based on a case study of Brazil, and explore coalitions in economic reform to identify growth model’s social blocs. The article’s results unveil challenges to the employment of existing concepts and analytical framework; the need to build bridges between growth models and the political economy of development; and an exploratory assessment of growth model contributions to Brazil's postwar development. Thereof, in the long term, interest shifts of economic elites between liberal and non-liberal economic regimes suggest a fragility of repeated attempts to form a durable developmental coalition, a process dynamic that frays state-permeated capitalism positive externalities. It concludes that both path dependent developmental institutions, which hinder change, and growth instability limit the possibilities of designing institutional reforms out of the middle-income trap.

Digital markets, competition regimes and models of capitalism: A comparative institutional analysis of European and US responses to Google

The comparative capitalism literature examined how institutions vary on a national or societal level and how these differences affect multinational companies’ strategies. Yet, little attention has been devoted to cross-national or regional differences in the governance of competition, especially in the context of digitalization of markets. The article seeks to fill this gap by looking at the case of Google. It traces the process of the stark US–EU disagreement over Google’s abuse of dominant position in digital markets, which resulted in one of the largest fines in the EU history. It is argued that the variation in the response to the company’s market and nonmarket strategies are traced back to differences between Ordoliberal and Chicago School ideas, which are embedded in the ‘competition regimes’ of European and US capitalist models. The article concludes by discussing the implications of these findings for varieties of capitalism frameworks.

The Comparative Political Economy of Growth Models: Explaining the Continuity of FDI-Led Growth in Ireland and Hungary

This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of government but rarely to fundamental changes in the growth regime. Rather, growth models can be traced to the interactions and interests of dominant corporations within a country and its policymaking elites. The argument is developed through a comparative case study research design, using the case of foreign direct investment–led (FDI-led) growth in Ireland and Hungary. FDI-led growth regimes are a universe of cases that rely on state-led industrial and enterprise policies targeting the capital investment of foreign-owned multinational firms. Despite periods of noisy electoral politics challenging basic tenets of the FDI-led growth model in both Hungary and Ireland, the continuity of FDI-oriented growth is traced to the corporate politics of business-state elite deals.

Always a Winning Strategy? Wage Moderation’s Conditional Impact on Growth Outcomes

Wages and wage bargaining institutions are foundational components of comparative capitalism research. Supply-side comparative capitalism research has often assumed that wage moderation—facilitated through highly coordinated wage-setting institutions—produces beneficial growth outcomes. This supposition stems from the logic that restrained unit labor cost growth causes firms to increase employment and output. However, through its demand-side perspective, new growth model literature questions the virtues of wage moderation, because the restraint of wages can be detrimental to growth via its suppression of domestic consumption. This chapter empirically tests under what conditions will wage moderation produce economic growth. Using a first-difference, distributive lag panel analysis of eighteen OECD countries from 1970 to 2015, its findings largely resonate with predictions within the growth model literature. In the presence of wage restraint, countries with larger export shares and highly coordinated wage-setting institutions realize higher growth and lower unemployment than countries with smaller export shares and uncoordinated wage-setting institutions. In contrast, wage inflation produces better growth outcomes for countries with uncoordinated wage-setting, relative to those with highly coordinated wage-setting institutions. These results suggest that wage restraint is not a winning strategy for all growth models. Rather, wage moderation is associated with better growth (and unemployment) outcomes only for countries with export-led growth strategies.

From Varieties of Capitalism to European Growth Models: towards a critical synthesis

The widespread belief that globalization would lead to the gradual convergence of advanced capitalist economies was challenged by the emergence of the Comparative Capitalism (CC) literature. Arguably the most influential approach within CC is the Varieties of Capitalism (VoC) model which argues that differences among advanced capitalist economies not only do not fade away but may be amplified due to the disparate comparative institutional advantages that various socioeconomic models may hold. VoC, nonetheless, was soon criticized -among others- for its binary ontological framework and heuristic shortcomings by the second generation CC. Contemporary writings within the third generation CC suggest a radical break from VoC as the focus should be, it is argued, on the demand, rather than the supply, side of the economy. This article posits that while the third generation CC has shifted attention to other institutional and policy fields, emphasizing essentially macroeconomic issues vis-à-vis economic policy reform, an epistemological rapprochement between the two main strands of CC could offer a more contextualized understanding of the different proposals put forward by the member states regarding the on-going Eurozone reform effort.

East Asia’s retail revolution: Diffusion of organized retailing and varieties of market development in Korea and Taiwan

Global diffusion of organized retailing over the last several decades brought extensive worldwide standardization of retail formats and technologies. Such development, however, has not led to the success of the same set of retailers but to varied prominence of core players across markets. Few studies comparatively analyse local market environments to assess this variation, and those that do rarely look beyond local policy measures or idiosyncratic consumer tastes. Presenting a sociological institutionalist alternative and comparing Korea’s and Taiwan’s paths to organized retail development, this article highlights how local business groups relied on network-hierarchy logics to coordinate and control new businesses amid MNC entry and global diffusion of retailing. The resulting dynamics of competition and cooperation illustrate the significance of institutionalized market environments for MNC performance. The study contributes to the comparative capitalism literature by highlighting institutionally embedded strategic behaviours of organizations as crucial contributors to continued national economic diversity amid heightening globalization.