Toward a Conceptual Framework for Understanding Institutional Change in Japanese Capitalism: Structural Transformations and Organizational Diversity

"The literature on comparative capitalism sees institutions largely as a set of incentives and constraints on rational behavior of business enterprises. Institutions constrain economic action, but also create new opportunities for economic action. For example, any market order needs the support of basic property rights and the rule of law (Khanna & Palepu, 2006), which both constrain certain uses of property and thereby enable other ones. Institutions may also solve certain collective action problems through different modes of governance over transactions – such as markets, hierarchies, networks, associations, state regulation and so on (Hollingsworth & Boyer, 1997). Consequently, many scholars have argued that different countries may have comparative advantages for different kinds of economic activity based on the diversity of their institutional frameworks (Amable, 2003, Hall & Soskice, 2001, Whitley, 1999)."