National Culture and Business Systems

Journal of Business and Policy Research 7, 100-122, 2012

38 Pages Posted: 30 Apr 2009 Last revised: 23 Oct 2013

See all articles by Wolfgang Breuer

Wolfgang Breuer

RWTH Aachen University

Astrid Juliane Salzmann

RWTH Aachen University - Department of Finance

Date Written: April 30, 2009

Abstract

We extend existing research in cultural economics and offer a comprehensive analysis on the impact of culture on the structuring of business systems. In a series of cross-country comparisons, we show that national culture is statistically significant in determining the main business systems practiced in a country. Using the Schwartz cultural value model and data on the structuring of business systems, we analyze the impact of national culture on four dimensions of business systems – business strategies, firm-specific human capital, employee participation, and dismissal protection. According to our study, the impact of culture is considerable, having even stronger influence than financial systems. In a systemic approach we find that the bank-based business system is particularly related to the cultural dimensions of Autonomy, Egalitarianism, and Harmony, whereas the market-based business system is notably connected to Embeddedness, Hierarchy, and Mastery. Our findings suggest several implications for the comparative advantages of business systems and the choice of corporate strategies.

Keywords: business systems, innovation strategy, finance, national culture

JEL Classification: A13, D92, P51, Z10

Suggested Citation

Breuer, Wolfgang and Salzmann, Astrid Juliane, National Culture and Business Systems (April 30, 2009). Journal of Business and Policy Research 7, 100-122, 2012, Available at SSRN: https://ssrn.com/abstract=1397241 or http://dx.doi.org/10.2139/ssrn.1397241

Wolfgang Breuer

RWTH Aachen University ( email )

Templergraben 55
D-52056 Aachen, 52056
Germany

Astrid Juliane Salzmann (Contact Author)

RWTH Aachen University - Department of Finance ( email )

Templergraben 64
Aachen, 52056
Germany

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