The Institutional Construction Of Firms

The nature and economic role of legally constituted firms varies between market economies and changes over time. In particular, the governance of leading firms and how they develop distinctive organizational capabilities vary between institutional regimes and their supporting political-economic coalitions. These characteristics can be combined to distinguish five ideal types of firms that dominate different kinds of market economies. Institutions governing trust and authority relationships, state economic and legal policies, financial and labor markets and skill formation systems affect the development and change of dominant kinds of firms.