This paper examines various aspects of comparative economic organization, particularly different types of contractual governance. Despite the widespread claims of global convergence and market-led institutional reform, there is still conspicuous resilience of national specificity and societal variance of institutions that are pertinent to considerations of regulation, policy and business strategy. We provide an evaluation of various debates on the effects of globalisation, concentrating on the literature on state capacity and national business systems, national competitiveness and country-specific firm strategy, and societal variance of institutions. Our main analysis of contract enforcement is concerned with a fundamental question; how transaction costs may influence the emergent forms of institutional arrangements across different societies. We argue that the relative configuration of institutional arrangements facilitating economic exchange is shaped by different modalities of enforcement. Based on the institutionalist insights (Williamson, 1985; North, 1990), we propose a typology of business exchange and enforcement: contract, trust and hostage.
Get full access to this article
View all access options for this article.
References
1.
AlbertM. (1993). Capitalism vs. Capitalism. New York: Four Wall Eight Windows.
2.
ArchibugiD.MichieJ. (1997). Technological globalisation and national systems of innovation: an introduction. in ArchibugiD.MichieJ. (eds) Technology, Globalisation and Economic Performance. Cambridge: Cambridge University Press.
3.
ArchibugiD.HowellsJ.MichieJ. (1999). Innovation systems and policy in a global economy. in ArchibugiD.HowellsJ.MichieJ. (eds.) Innovation Policy in a Global Economy. Cambridge: Cambridge University Press.
4.
BakerD.EpsteinG.PollinR. (1998). (eds.), Globalization and Progressive Economic Policy. New York: Cambridge University Press.
5.
BarzelY. (1982). Measurement cost and the organization of markets. Journal of Law and Economics, 25, 27–48.
6.
BartholomewS. (1997). National systems of biotechnology innovation: complex interdependence in the global system. Journal of International Business Studies, 27, 241–266.
7.
BealeH.DugdaleA. (1975). Contracts between businessmen: planning and the use of contractual remedies. British Journal of Law and Society, 2, 45–60.
8.
BergerP.LuckmannT. (1966). The Social Construction of Reality. Garden City, NY: Doubleday.
9.
BergerS. (1996). Introduction. in BergerS.DoreR. (eds.) National Diversity and Global Capitalism. Ithaca: Cornell University Press.
10.
BergerS.DoreR. (eds) (1996). National Diversity and Global Capitalism. Ithaca: Cornell University Press.
11.
BernsteinL. (1992). Opting out of the legal system: extralegal contractual relations in the diamond industry. Journal of Legal Studies, 21, 115–157.
12.
BestM. (1990). The New Competition: Institutions of Industrial Restructuring. Cambridge: Policy Press.
13.
BoisotM.ChildJ. (1988). The iron law of fiefs: bureaucratic failure and the problem of governance in the Chinese economic reforms. Administrative Science Quarterly, 33, 507–527.
14.
BoyerR. (1996). The convergence hypothesis revisited: globalization but still the century of nations? in BergerS.DoreR. (eds.) National Diversity and Global Capitalism. Ithaca: Cornell University Press.
15.
BurtR. (1992). Structural Holes. Cambridge, MA: Harvard University Press.
16.
CavesR.MarinD. (1992). Countertrade transactions: theory and evidence. Economic Journal, 102, 1171–1183.
17.
ChandlerA.D. (1962). Strategy and Structure: Chapters in the History of the American Industrial Enterprise. Cambridge, MA: MIT Press.
18.
ChandlerA.D. (1984). The emergence of managerial capitalism. Review, 58, 473–503.
19.
ChandlerA.D. (1990). Scale and Scope: The Dynamics of Industrial Capitalism. Harvard Business School Press, Cambridge, MA.
20.
ChangH.-J.PalmaG.WhittakerD.H. (1998). The Asian crisis: introduction. Cambridge Journal of Economics. Special issue, 22, 649–652.
21.
CharkhamJ. (1994). Keeping Good Company: A Study of Corporate Governance in Five Countries. Oxford University Press.
22.
ChoiC.J. (1994). Contract enforcement across cultures. Organization Studies, 15, 673–682.
23.
ChoiC.J.LeeS.H.OhD. (1995). The strategy of grouping and reputation linkage in clubs and multi-product firms. European Journal of Political Economy, 11, 521–533.
24.
CoaseR. (1937). The contractual nature of the firm. Journal of Law and Economics, 4, 386–405.
25.
CooterR.LandaJ. (1984). Personal versus impersonal trade and the optimal size of clubs. International Review of Law and Economics, 4, 15–22.
26.
DeakinS.MichieJ. (1997). Contracts and competition: an introduction. Cambridge Journal of Economics, Special issue, 21, 121–125.
27.
DenzauA.T.NorthD.C. (1993). Shared mental models: ideologies and institutions. Working paper, Center for the Study of Political Economy, Washington University, St. Louis, MO.
28.
DiMaggioP.PowellW. (1983). The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147–60.
29.
DoreR. (1973). British Factory-Japanese Factory: The Origins of National Diversity in Industrial Relations. Berkeley: University of California Press.
30.
DoreR. (1983). Goodwill and the spirit of market capitalism. British Journal of Sociology, 34, 459–482.
31.
DouglasS.P.WindY. (1987). The myth of globalisation. Columbia Journal of World Business, 22, 19–29.
32.
DunningJ.H. (1996). Reappraising the eclectic paradigm in an age of alliance capitalism. Journal of International Business Studies, 26, 461–480.
33.
EasterbrookF. (1997). International corporate differences: markets or law. Journal of Applied Corporate Finance, 9, 23–29.
34.
EllicksonR. (1991). Order without Law. Cambridge, MA: Harvard University Press.
35.
ErramilliM.K. (1996). National and subsidiary ownership patterns in multinational corporations. Journal of International Business Studies, 27, 271–291.
36.
FamaE.F.JensenM.C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26, 327–349.
37.
FletcherR. (1996). Network theory and countertrade transactions. International Business Review, 5, 167–189.
38.
FranksJ.MayerC. (1997). Corporate ownership and control in the UK, Germany and France. Journal of Applied Corporate Finance, 9, 30–45.
39.
GerlachM. (1992). Alliance Capitalism: The Social Organization of Japanese Business. Berkeley: University of California Press.
40.
GerlachM.LincolnJ. (1992). The Organization of business networks in the U.S. and Japan. in EcclesR.NohriaN. (eds.) Networks and Organizations. Boston: Harvard Business School Press.
41.
GestrinM.V.KnightR.F.RugmanP.M. (2000). Templeton Global Performance Index2000. Oxford: Templeton College, University of Oxford.
42.
GiddensA. (1999). Runaway World: How Globalization Is Reshaping Our Lives. London: Granta Books.
43.
GranovetterM. (1985). Economic action and social structure: the problem of embeddedness. American Journal of Sociology, 9, 481–510.
44.
GranovetterM. (1996). Coase revisited: business groups in the modern economy. Industrial and Corporate Change, 4, 93–130.
45.
GriefA. (1993). Contract enforceability and economic institutions in early trade: the Maghribi traders’ coalition. American Economic Review, 82, 525–548.
46.
GriefA. (1994). Cultural beliefs and the organization of society: a historical and theoretical reflection on collectivist and individualist societies. Journal of Political Economy, 102, 912–950.
47.
GriefA.MilgromP.WeingastB. (1994). Coordination, commitment, and enforcement: the case of the Merchant Guild. Journal of Political Economy, 102, 745–776.
48.
HallP.A.SoskiceD. (2001). Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press.
49.
HarlaftisG. (1996). A History of Greek-Owned Shipping: The Making of an International Tramp Fleet: 1830 to the Present Day. London: Routledge.
50.
HartO.MooreJ. (1990). Property rights and the nature of the firm. Journal of Political Economy, 98, 1119–1158.
51.
HeldD.McGrewA.GoldblattD.PerratonJ. (1999). Global Transformations: Politics, Economics and Culture. Cambridge: Polity Press.
52.
HennartJ-F. (1989). The transaction costs rationale for countertrade. Journal of Law, Economic and Organization, 5, 127–153.
53.
HennartJ-F. (1990). Some empirical dimensions of countertrade. Journal of International Business Studies, 21, 243–270.
54.
HillC. (1995). National institutional structures, transaction cost economizing and competitive advantage. Organization Science, 6, 119–131.
55.
HirschP.LounsburyM. (1996). Rediscovering volition: the institutional economics of Douglass C. North. Academy of Management Review, book review essay, 21, 872–884.
56.
HirstP.ThompsonG. (1999). Globalization in Question. 2nd edition. Cambridge: Polity.
57.
HittM.T.DacinB.T.ParkD. (1997). Understanding the differences in Korean and U.S. executives’ strategic orientations. Strategic Management Journal, 18, 159–167.
58.
HollingsworthJ.R.BoyerR. (eds) (1997). Contemporary Capitalism: The Embeddedness of Institutions. Cambridge: Cambridge University Press.
59.
HuY.S. (1992). Global or stateless corporations are national firms with international operations. California Management Review, 34, 115–126.
60.
JensenM.C.MecklingW.H. (1976). Theory of the firm, managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3, 305–360.
61.
KingJ.B. (1988). Prisoner’s paradoxes. Journal of Business Ethics, 8, 475–487.
62.
KitsonM.MichieJ. (2000). The Political Economy of Competitiveness: Employment, Public Policy and Performance. London: Routledge.
63.
KobrinS.J. (1997). The architecture of globalization: state sovereignty in a networked global economy. in DunningJ.H. (ed.) Governments, Globalisation, and International Business. Oxford: Oxford University Press.
64.
KogutB. (1991). Country capabilities and the permeability of borders. Strategic Management Journal, Summer special issue, 12, 33–47.
65.
KogutB. (ed.) (1993). Country Competitiveness: Technology and the Organising of Work. Oxford: Oxford University Press.
66.
KogutB.SinghS. (1998). The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19, 411–432.
La PortaR.Lopex-de-SilanesF.ShleiferA. (1999). Corporate ownership around the world. Journal of Finance, 54, 471–517.
69.
LandaJ. (1994). Trust, Ethnicity and Identity. Michigan: University of Michigan Press.
70.
LaneC. (2000). Globalisation and the German model of capitalism: erosion or survival. British Journal of Sociology, 51, 207–234.
71.
LazonickW.O’SullivanM. (1996). Organization, finance and international competition. Industrial and Corporate Change, 5, 1–49.
72.
LeeP.M. (1997). A comparative analysis of layoff announcements and stock price reactions in the U.S., & Japan. Strategic Management Journal, 18, 879–894.
73.
LevittT. (1983). The globalisation of markets. Harvard Business Review. May–June, 92–102.
74.
LipseyR.G. (1997). Globalisation and national government policies: an economist’s view. in DunningJ.H. (ed.) Governments, Globalisation, and International Business. Oxford: Oxford University Press.
75.
MacaualyS. (1963). Non-contractual relations in business: a preliminary study. American Sociological Review, 50, 55–70.
76.
MacneilI.R. (1974). The many futures of contract. Southern California Law Review, 47, 691–738.
77.
MarinD.SchnitzerM. (1995). Tying trade flows: a theory of countertrade with evidence. American Economic Review, 85, 1047–1064.
78.
MayerC. (1997). The City and corporate performance: condemned or exonerated. Cambridge Journal of Economics, 21, 291–302.
79.
MichieJ. (1999). Introduction. in MichieJ.GrieveSmith J. (eds.) Global Instability: The Political Economy of World Economic Governance. London: Routledge.
80.
MichieJ.Grieve SmithJ. (eds.) (1999). Global Instability: The Political Economy of World Economic Governance. London: Routledge.
MurthaT.LenwayA. (1994). Country capabilities and the strategic state: national political institutions affect multinational corporations’ strategies. Strategic Management Journal, Summer special issue, 15, 113–129.
83.
NelsonR. (1992). Recent writings on competitiveness: boxing the compass. California Management Review, 20, 117–125.
84.
NelsonR. (ed.) (1993). National Innovation Systems: A Comparative Study. Oxford: Oxford University Press.
85.
NelsonR.WinterS. (1982). An Evolutionary Theory of Economic Change. Cambridge, MA: The Belknap Press of Harvard University Press.
86.
NorthD.C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
87.
NorthD.C. (1991). Institutions. Journal of Economic Perspectives, 5, 97–112.
88.
O’SullivanM.A. (2000). Contests for Corporate Control: Corporate Governance and Economic Performance in the U.S. and Germany. New York: Oxford University Press.
89.
OhmaeK. (1991). The Borderless World: Power and Strategy in the Interlinked Economy. New York: Haper Perennial.
90.
OlsonM. (1992). The hidden path to a successful economy. in ClagueC.RausserG. (eds) The Emergence of Market Economies in Eastern Europe. Cambridge, MA: Blackwell Publishers.
91.
OrruM.BiggartN.W.HamiltonG.G. (1997). The Economic Organization of East Asian Capitalism. New York: Sage.
92.
PengM.W.HeathP.S. (1996). The growth of the firm in planned economies in transition: institutions, organizations, and strategic choice. Academy of Management Review, 21, 492–528.
93.
PorterM.E. (1990). The Competitive Advantage of Nations. London: MacMillan.
94.
ReddingS.G. (1990). The Spirit of Chinese Capitalism. Berlin: de Gruyter.
95.
ReichR.B. (1991). The Work of Nations: A Blueprint for the Future. London: Simon and Schuster.
96.
RoeM. (1993). Some differences in corporate structure in Germany, Japan and the United States. Yale Law Journal, 102, 1927–2003.
97.
RoeM. (1994). Strong Managers, Weak Owners: the Political Roots of American Corporate Finance. Princeton: Princeton University Press.
98.
RoeM. (1997). The political roots of American corporate finance. Journal of Applied Corporate Finance, 9, 8–22.
99.
RugmanA. (2000). The End of Globalization. London: Random House Business Books.
100.
RuigrokW.van TulderR. (1995). The Logic of International Restructuring. London: Routledge.
101.
SchellingT.C. (1960). The Strategy of Conflict. Cambridge, MA: Harvard University Press.
102.
ScottJ. (1997). Corporate Business and Capitalist Classes. Oxford: Oxford University Press.
103.
ShleiferV.VishnyR. (1997). A survey of corporate governance. Journal of Finance, 52, 737–783.
104.
SorgeA. (1991). Strategic fit and the societal effect: interpreting cross-national comparisons of technology, organization, and human resources. Organization Studies, 12, 161–190.
105.
StrangeS. (1997). An international political economy perspective. in DunningJ.H. (ed.) Governments, Globalisation, and International Business. Oxford: Oxford University Press.
106.
StreekV. (1992). Social Institutions and Economic Performance. Beverly Hills, CA: Sage.
107.
ThomasL.G.WaringG. (1999). Competing capitalisms: capital investment in American, German and Japanese firms. Strategic Management Journal, 20, 729–748.
108.
ThomsenS.PedersenT. (2000). Ownership structure and performance in the largest European companies. Strategic Management Journal, 21, 689–705.
109.
WeberM. (1947). The Theory of Social and Economic Organization. New York: Free Press.
110.
WeissL. (1997). Globalization and the myth of powerless state. New Left Review. Iss., 225, 3–27.
111.
WeissL. (1999). Globalization and national governance: antinomy or interdependence?Review of International Studies, 25, 1–30.
112.
WhitleyR.D. (1990). Eastern Asian enterprise structures and the comparative analysis of forms of business organizations. Organization Studies, 11, 47–70.
113.
WhitleyR.D. (1991). The social construction of business systems in East Asia. Organization Studies, 12, 1–28.
114.
WhitleyR.D. (1999). Divergent Capitalisms. Oxford: Oxford University Press.
115.
WilliamsonO. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press.
116.
WilliamsonO. (1983). Credible commitments: using hostages to support exchange. American Economic Review, 73, 519–540.
117.
WilliamsonO. (1985). The Economic Institutions of Capitalism. New York: Free Press.
118.
WilliamsonO. (1993). Calculativeness, trust, and economic organization. Journal of Law and Economics, 36, 269–296.
119.
WilliamsonO. (1994). Transaction cost economics and organization theory. in SmelserN.SwedbergR. (eds.) The Handbook of Economic Sociology. Princeton: Princeton University Press.
120.
ZukinS.DiMaggioP. (eds.) (1990). Structures of Capital: The Social Organization of the Economy. Cambridge: Cambridge University Press.
