Socioecon

Socio-Economic Review (2013) 11, 265–300
Advance Access publication February 14, 2013

doi:10.1093/ser/mwt002

Asian business systems: institutional comparison, clusters and implications for varieties of capitalism and business systems theory
INSEAD, 1 Ayer Rajah Avenue, Singapore 138676, Singapore
*

Correspondence: [e-mail]

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 and Vietnam—with one another and five major
Western economies—France, Germany, Sweden, the UK and the 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
(VOC) 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, Varieties of Capitalism, social capital, culture, China, Japan
JEL classification: P1, P2, P50

1.

Introduction

The exploration of Asian business systems1 can look back on a long and proud history. Among its earlier classics are works such as Dore’s (1973) comparison
1

In this paper, we define ‘Asia’ to mean the land mass from India to Japan, excluding the territory of
Russia. We use the term ‘business system’ to refer to the institutions—that is, the ‘humanly devised constraints that shape human interaction’ (North, 1990, p. 3)—governing economic activity inside and outside the firms, as identified in the models of

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