Competition & Change

This article examines the introduction of shareholder value in the German business system. Its main argument is that the idea of shareholder value has been introduced and adopted in different ways by German firms. Divergences are identified both at the discursive level and at the level of organisational structures and practices of corporate governance. They can be understood by applying translation theory to the adoption process. The main tenet of translation theory is that ideas are constantly being modified when they enter new contexts, mainly due to the diversity of actors involved in the process of translation. Translation theory therefore goes beyond traditional diffusion studies, which tend to assume a linear and homogeneous transmission of ideas. The analysis of two German firms, DaimlerChrysler and Volkswagen AG, lends support to the explanatory potency of translation theory.

Pension reform in European political economies has increased the institutional proximity of local pension arrangements and emerging retirement-income institutions with the prospects of global financial markets and conventional investment practice. Applying new institutional theory to case studies of pension reforms in Finland, Germany and France, we find that this increasing relational proximity is deeply embedded in existing institutional practices typical of each political economy, simultaneously supporting continuity and change. This suggests that the linearity inherent in debates over convergence and divergence in comparative capitalism needs to move to more multidimensional understandings of political–economic variety more sensitive to agency in order to grasp what is ultimately occurring as political economies transform and interact, particularly under conditions of financialisation.

We complement the existing global value chain literature by presenting empirical evidence on technology upgrading among domestic suppliers operating in the less-investigated producer-driven engineering industries. Unique firm-level data from 22 Swedish manufacturing affiliates and their 1349 suppliers in China, India, Brazil and Mexico show that domestically-owned suppliers are generally provided with substantial technological support by their TNC customers as part of regular business relations. The transfer of product and process technology is especially facilitated through a combination of local business linkages, which enhance tacit learning, and global business linkages, where the management challenges related to operating global sourcing strategies enhance mutual commitments from both buyers and suppliers. Thus, rather than resulting in ‘captive’ governance structures, our findings suggest that in these types of value chain ‘developmentaly’ buyer-supplier relations are likely in many emerging markets, resulting in technological upgrading of less capable, domestic suppliers.