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Mapping the institutional capital of high-tech firms: A fuzzy-set analysis of capitalist variety and export performance

Martin R Schneider, Conrad Schulze-Bentrop and Mihai Paunescu
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Martin R Schneider: [1] University of Paderborn, Paderborn, Germany[2] Institute for Labour Law and Industrial Relations in the European Community, Trier, Germany
Conrad Schulze-Bentrop: University of Paderborn, Paderborn, Germany
Mihai Paunescu: SAS Institute Austria, Vienna, Austria

Journal of International Business Studies, 2010, vol. 41, issue 2, 246-266

Abstract: We examine how institutional configurations, not single institutions, provide companies with institutional capital. Building on the varieties-of-capitalism approach, it is argued that competitive advantage in high-tech industries with radical innovation may be supported by combinations of certain institutional conditions: lax employment protection, weak collective bargaining coverage, extensive university training, little occupational training, and a large stock market. Furthermore, multinational enterprises engage in “institutional arbitrage”: they allocate their activities so as to benefit from available institutional capital. These hypotheses are tested on country-level data for 19 OECD economies in the period 1990 to 2003. A fuzzy-set qualitative comparative analysis yields several interesting findings. A high share of university graduates and a large stock market are complementary institutions leading to strong export performance in high-tech. Employment protection is neither conducive nor harmful to export performance in high-tech. A high volume of cross-border mergers and acquisitions, as a form of institutional arbitrage leading to knowledge flows, acts as a functional equivalent to institutions that support knowledge production in the home economy. Implications of these findings for theory, policy, and the analysis of firm-level behavior are developed.

Date: 2010
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