Which model of capitalism best delivers both wealth and equality&quest

William Q Judge, Stav Fainshmidt and J Lee Brown
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William Q Judge: College of Business & Public Administration, Old Dominion University, Norfolk, USA
Stav Fainshmidt: College of Business, Florida International University, Miami, USA
J Lee Brown: School of Business & Economics, Fayetteville State University, Fayetteville, USA

Journal of International Business Studies, 2014, vol. 45, issue 4, 363-386

Abstract: Capitalism is the dominant economic system adopted throughout the global economy, but there are many different models of capitalism practiced depending on what the society decides “economic effectiveness” is. In this study, we assert that an effective economy simultaneously achieves two seemingly divergent outcomes: it (1) creates economic wealth efficiently, and (2) shares that wealth equitably. Employing insights from Whitley’s national business systems framework and fuzzy set analysis, we examine how national institutions collectively configure with respect to the overall level of equitable wealth creation within 48 developed and developing economies. We find that three configurations are associated with relatively high levels of equitable wealth creation, and another three are associated with relatively low levels. As such, our analysis supports the notion of equifinality – that there is no one optimal model of capitalism. Furthermore, we begin to demonstrate that these models of capitalism are constantly evolving, but their evolution is generally slow even when considering the practice of capitalism before and after the 2008 global economic crisis. We discuss the implications of these findings for the study of international business, with a special emphasis on considering a more holistic context for exploring how multinational enterprises interact with their institutional environment(s).

Date: 2014
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