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Does Social Democracy Matter? Corporate Governance Reforms in Switzerland and Sweden (1980-2005)


  • Gerhard Schnyder


This paper tests the accuracy of Roe's (2003) claim that 'social democracies' tend to have insider-orientated corporate governance systems, for two extreme cases concerning Roe's independent variable: Switzerland and Sweden. Starting from a position in which both were clearly insider-orientated systems, there was a significant weakening of insider control in Switzerland during the 1990s, but no comparable change in Sweden up until the early 2000s. These developments occurred against the background of contrasting political contexts in the two countries: in Switzerland, change took place in a context of stable dominance over the political arena by centre-right parties; in Sweden, no change took place despite the fact that centre-right parties managed several times to break the traditional social-democratic dominance over government. Thus it would seem that political power relations as such do not explain the observed trajectories of these two corporate governance systems. Instead, the different trajectories are explained by the different preferences of central political and economic actors. The Swiss labour movement, which was traditionally under the dominance of a strong employer side, had important incentives to favour increasing external shareholder control over firms. Conversely, the Swedish labour movement, which had played a considerable part in the shaping of the Swedish corporate governance system, had no such incentives. Also, as Swiss banks started to reorientate their strategies towards financial market-related activities, they became a very important pro-shareholder reform force in Switzerland. Swedish banks, which were part of business groups in which financial interests did not necessarily prevail over industrial interests, did not play any comparable role.

Suggested Citation

  • Gerhard Schnyder, 2008. "Does Social Democracy Matter? Corporate Governance Reforms in Switzerland and Sweden (1980-2005)," Working Papers wp370, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp370
    Note: PRO-2

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    References listed on IDEAS

    1. Ulf Jakobsson & Magnus Henrekson, 2001. "Where Schumpeter was nearly right - the Swedish model and Capitalism, Socialism and Democracy," Journal of Evolutionary Economics, Springer, vol. 11(3), pages 331-358.
    2. repec:hrv:faseco:30747162 is not listed on IDEAS
    3. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
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    Cited by:

    1. Schnyder, G., 2010. "Varieties of Insider Corporate Governance: Centre-Right Preferences and the Determinants of Reform in the Netherlands, Sweden and Switzerland," Working Papers wp406, Centre for Business Research, University of Cambridge.
    2. Christopher Koch & Ola Nilsson & Katarina Eriksson, 2014. "Does shareholder protection affect the performance of analysts as a gatekeeper?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(2), pages 315-345, May.

    More about this item


    Corporate governance; Switzerland; Sweden; political economy;

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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