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New Frontiers in Entrepreneurship pp 67–93Cite as

Corporate Governance Systems: Effects of Capital and Labor Market Congruency on Corporate Innovation and Global Competitiveness

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Part of the book series: International Studies in Entrepreneurship ((ISEN,volume 26))

Abstract

Drawing on institutional economics, this article addresses how institutional congruence between capital and labor markets influences corporate governance systems, which, in turn, create differences in national corporate innovation and entrepreneurship systems and subsequently global competitiveness. We argue that such institutional congruence cultivates two ideal corporate governance systems. The first ideal type is the market-based system with transactional capital and external labor markets. This corporate governance system facilitates more explorative and revolutionary innovations. The second ideal type is the relationship-based governance system with relational capital and internal labor markets. This system facilitates more exploitative and evolutionary innovations. We wrap up by discussing how institutional adjustments are being pursued for each governance system because each type has advantages and disadvantages that require adjustments. Finally, we present implications that our congruence model suggests for global competitiveness, high-tech management, and public policy regarding national innovation systems.

This chapter has appeared in Journal of High Technology Management Research, 15 (2004) 293–315.

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Author information

Authors and Affiliations

  1. George R. Brown Professor of Strategic Management, Jesse H. Jones Graduate School of Business, Rice University, 6100 Main Street, MS-531, Houston, Texas, 77005, USA

    Robert E. Hoskisson

  2. Department of Management, Chinese University of Hong Kong, Hong Kong, China

    Daphne Yiu

  3. Korea University Business School, Korea University, Seoul, 136-701, Republic of Korea

    Hicheon Kim

Authors
  1. Robert E. Hoskisson
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  2. Daphne Yiu
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  3. Hicheon Kim
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Corresponding author

Correspondence to Robert E. Hoskisson .

Editor information

Editors and Affiliations

  1. Indiana University, Bloomington, 47405, USA

    David B. Audretsch

  2. Facoltà di Economia, Dipto. Impresa, Culture e Società, Università di Catania, Corso Italia 55, Catania, 95129, Italy

    Giovanni Battista Dagnino

  3. Facoltà di Economia, Dipto. Impresa, Culture e Società, Università di Catania, Corso Italia 55, Catania, 95129, Italy

    Rosario Faraci

  4. Dept. Management, Arizona State University, S. Rural Rd. 1711, Tempe, 85287-5906, USA

    Robert E. Hoskisson

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Hoskisson, R.E., Yiu, D., Kim, H. (2009). Corporate Governance Systems: Effects of Capital and Labor Market Congruency on Corporate Innovation and Global Competitiveness. In: Audretsch, D., Dagnino, G., Faraci, R., Hoskisson, R. (eds) New Frontiers in Entrepreneurship. International Studies in Entrepreneurship, vol 26. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-0058-6_4

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