Varieties of capitalism, governance, and high‐tech export performance. A fuzzy‐set analysis of the new EU member states
| Date | 28 June 2011 |
| DOI | https://doi.org/10.1108/01425451111140622 |
| Pages | 334-355 |
| Published date | 28 June 2011 |
| Author | Matthew M.C. Allen,Maria L. Aldred |
| Subject Matter | HR & organizational behaviour |
Varieties of capitalism,
governance, and high-tech export
performance
A fuzzy-set analysis of the new EU member
states
Matthew M.C. Allen
Manchester Business School, The University of Manchester,
Manchester, UK, and
Maria L. Aldred
Manchester Metropolitan University Business School, Manchester, UK
Abstract
Purpose – This paper aims to assess the extent to which convergence in institutional regimes is likely
to occur, by examining all ten new EU member states in Central and Eastern Europe in terms of their
development of comparative advantages in high-tech export markets either by drawing on foreign
investors in the form of multinational companies or by making use of domestic institutional resources.
Design/methodology/approach – The article uses fuzzy sets and qualitative comparative analysis
to examine both necessary and sufficient causes of success in high-tech export markets. By doing so, it
can address the important issue of institutional complementarity.
Findings – While it finds that countries that have stronger records in such markets share common
features, there are also important differences between them – not least in the areas of employee
relations. This, together with other evidence presented in the paper, suggests that convergence around
a specific institutional model is unlikely to happen.
Originality/value – Analysing, unlike many previous studies, all ten new EU member states in
Central and Eastern Europe enables conclusions to be drawn that apply to the whole region. The novel
method used in this article means that the extent of any complementarity between different
institutions can be addressed, and ensures that issues relating to convergence/divergence are explored.
The article, therefore, contributes to a number of important debates on the convergence among types
of capitalism, the dependency of the new EU member states on foreign investors, and the institutional
foundations for success in high-tech export markets.
Keywords Organizations,Central and Eastern Europe, Convergence,Employee relations, Fuzzy sets,
High-technologyexports
Paper type Research paper
1. Introduction
The new member states of the European Union (EU) in Central and Easte rn Europe
(CEE) provide a strong basis on which to assess trends in corporate governance
regimes and employment relations. Indeed, they offer prime cases to study the extent to
which these systems are likely to converge – if they do not follow more path-dependent
trajectories (Czaban and Henderson, 2003; Djankov et al., 2003; Hall and Soskice, 2001a;
Whitley, 1999) – around a common CEE model or around those associated with
neo-liberal forms of capitalism. The reasons for this are threefold. First, the new
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Employee Relations
Vol. 33 No. 4, 2011
pp. 334-355
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425451111140622
member states are highly dependent on foreign direct investment (FDI) (Bohle and
Greskovits, 2006; Lane and Myant, 2007; No
¨lke and Vliegenthart, 2009). Second, the
competition between the new member states for such investment is likely to lead to
pressures to create corporate-governance and employment regulations that are most
attractive to foreign companies and, hence, that are likely to impose fewer constraints
on business and institutional entrepreneurs than might otherwise be the case
(Hansmann and Kraakman, 2000; Lane, 2007; McCahery et al., 2004; Walgenbach and
Meyer, 2008). Finally, the collapse of communism in the region represented an
opportunity to introduce changes during a period when limitations to change may have
been weakened (Vaughan-Whitehead, 2003).
The issues of potential institutional convergence within the region have been
addressed from a variety of perspectives. For instance, political-economy scholars have
attempted to trace the extent to which open capital markets have led to convergence
around neo-liberal models of corporate governance and employment regulations in the
region (Knell and Srholec, 2007; Lane, 2007; No
¨lke and Vliegenthart, 2009). Others,
drawing, inter alia, on aspects of the literature on global commodity chains, have
analysed these issues from a business perspective (see, for instance, Czaban and
Henderson, 2003; Henderson, 1998). Despite these differing perspectives, there are a
number of commonalities among previous studies. First, several important studies
have either tended to treat the new member states (or a sub-set of them) as a relatively
homogeneous group (Crowley, 2004; King and Sznajder, 2006; Lane, 2005; Mykhnenko,
2007; No
¨lke and Vliegenthart, 2009; see Allen and Aldred, 2009; Bohle and Greskovits,
2007a, b) or focused on a very small number of countries in the region (Buchen, 2007;
Czaban and Henderson, 2003; Feldmann, 2004, 2006). Second, the extent to which the
new member states are dependent on firms in other countries has often been assessed,
according to the OECD’s (2005, p. 172) classification of industries by technology
intensity, in terms of medium-high-, medium-low- and low-technology sectors (Bohle
and Greskovits, 2006; Czaban and Henderson, 2003; No
¨lke and Vliegenthart, 2009), but
not specifically high-technology industries. Finally, despite the differing emph ases in
the focus of previous studies, many have used the “Varieties of capitalism” paradigm
as an analytical starting point (see, for instance, Allen and Aldred, 2009; Bohle and
Greskovits, 2007b; Czaban and Henderson, 2003; Knell and Srholec, 2007; Lane and
Myant, 2007; No
¨lke and Vliegenthart, 2009).
From this common starting position, a theme that is emerging in the literature is the
degree to which countries in CEE represent a different variety of capitalism, in general,
and, more specifically, the extent to which they are dependent on foreign investors to
increase their innovative capabilites (Bohle and Greskovits, 2007b; Do
¨rrenba
¨cher, 2007;
No
¨lke and Vliegenthart, 2009). Much of this literature paints a relatively pessimistic
picture of the ability of countries in the region to break out of their dependency status
towards a path of economic development based on more radical forms of innovation.
For instance, Bohle et al. (2007, p. 83) have argued that:
A major feature of FDI in ECE [Eastern Central Europe] is that it is less market seeking than
efficiency seeking. A new cross-European division of labour has emerged, in which peripheral
eastern European locations compete with southern European countries for core types of
economic activities, and increasingly with western European countries.
Two corollaries of such contentions are that, first, FDI into the region is not strategic
asset seeking, and, second, firms in the region do not have the competencies to ward off
Varieties of
capitalism
335
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