Asian Business Systems: Institutional Comparison, Clusters, and Implications for Varieties of Capitalism and Business Systems Theory

Abstract

We present an institutional comparison of 13 major Asian business systems — China, Hong Kong, India, Indonesia, Japan, Laos, Malaysia, the Philippines, Singapore, Korea, Taiwan, Thailand, Vietnam — with one another and five major Western economies — France, Germany, Sweden, UK, USA. We find five major types of business systems in Asia: (post-)socialist, advanced city, emerging Southeast Asian, advanced Northeast Asian, and Japanese. With the exception of Japan, all Asian forms of capitalism are fundamentally distinct from Western types of capitalism. We conclude that the Varieties of Capitalism dichotomy is not applicable to Asia; that none of the existing major frameworks capture all Asian types of capitalism; and that Asian business systems (except Japan) cannot be understood through categories identified in the West. Our analysis further suggests a need for the field to invest in further research on social capital, culture, informality, and multiplexity.

Keywords: Asia, capitalism, varieties of, social capital, culture, China, Japan

JEL Classification: P1, P2, P50