Abstract
This paper examines the structures of capitalism in Southeast Asia. Following the lead of Gordon Redding and others, it argues that parallel to varieties of capitalism elsewhere, there are distinctive features to the Southeast Asian business system, but that institutions play a relatively large role compared to firm specific resources or industry structures. Historically, with the exception of Thailand all the countries in the region are former colonies. All including Thailand share a distinctive style of nationalism, and partly as a result of this, all are governed by states that claim to be strong and lay wide claims but whose capacities are low. Typical features of the region, particularly the roles of large business groups and the Chinese minority, also can be interpreted as a result of this history. One of the outcomes of the analysis is an extension of the varieties of capitalism approach along the dimensions of state capacity and state direction, and of the approach to the internationalizing firm along the dimensions of dynamic capacity and control of subsidiaries. A further outcome is a questioning of the traditional picture of indigenous Southeast Asian business people as lacking in entrepreneurial skills, or more broadly of Southeast Asian nations as lacking in entrepreneurial values. Rather, the past history of these countries has resulted in a set of structures that militate against successful entrepreneurial activity.
Similar content being viewed by others
Notes
He served as president of the coconut farmers’ association under Marcos, and borrowed money from the association to purchase a controlling interest in San Miguel. The holding was confiscated when Marcos fell, but Cojuangco regained possession under subsequent president Joseph Estrada. Following Estrada’s fall the government sued, contending that the original purchase was made with what were in reality tax revenues, and in 2005 the courts stripped Cojuangco of 27% of San Miguel, leaving him with 20%.
A parallel attempt to impart morality through a religious studies course failed when Chinese students did not take up the Confucianism option as hoped, and also because government leaders came to the conclusion that religion could form a basis for oppositional political activity. See Rahim, 1998; Tipton, 2008a.
Interview with a senior business analyst of an Australian mining company, November 2007. The reason may be that these lower level officials did not want to pass on the bad news that the mine had only an 8-year life expectancy even at the current extremely high prices prevailing for its output, and would be closed immediately if those prices declined.
See Thompson, 1989. Anecdotal evidence is extensive. In addition, although possible sample bias and variations in questionnaires make the results only suggestive, at the University of Sydney from 1998 through 2007 participants in executive training programs for middle and senior level government officials from Indonesia, Malaysia, Thailand, and the Philippines have typically seen themselves as an elite with a responsibility to guide their countries’ development, and responses of Master of Commerce students have consistently shown that Southeast Asians prefer taller management structures and a more autocratic leadership style than Europeans or Chinese. It is also suggestive that ethnic Chinese from Southeast Asia prefer taller structures than students from Southern China, the region from which their families generally came.
References
Anderson, B. 1991. Imagined communities: Reflections on the origin and spread of nationalism. Revised Ed. London: Verso.
Australia. 1995. Department of Foreign Affairs and Trade. East Asia Analytical Unit. Overseas Chinese business networks in Asia. Canberra: EAAU.
Australia. 2002. Department of Foreign Affairs and Trade. East Asia Analytical Unit. Changing corporate Asia: What business needs to know. 2 vols. Canberra: EAU.
Bartlett, C., & Ghoshal, S. 1989. Managing across borders: The transnational solution. Boston: Harvard Business School Press.
Bartol, K., Tein, M., Matthews, G., & Martin, D. 2003. Management: A Pacific Rim focus. Enhanced Ed. Boston: McGraw Hill.
Brooker, P. 1991. Three faces of fraternalism: Nazi Germany, fascist Italy, and imperial Japan. Oxford: Oxford University Press.
Brown, R. A. 1994. Capital and entrepreneurship in Southeast Asia. Houndmills: Macmillan.
Carney, M., & Gedajlovic, E. 2002a. The co-evolution of institutional environments and organization strategies: The rise of family business groups in the ASEAN region. Organization Studies, 23(1): 1–29.
Carney, M., & Gedajlovic, E. 2002b. International change and firm adaptation: Towards a typology of Southeast Asian corporate forms. Asia Pacific Business Review, 8(3): 31–60.
Caron, V. 2007. San Miguel bales out for $3b. Business Day, 9 November.
Chatterjee, P. 1986. Nationalist thought and the colonial world: A derivative discourse. London: Zed Books.
Cheung, A. B. L. 2003. Public service reform in Singapore: Reinventing government in a global age. In A. B. L. Cheung & I. Scott (Eds.). Governance and public sector reform in Asia: Paradigm shifts or business as usual?. London: RoutledgeCurzon.
Cheung, A. B. L., & Scott, I. (Eds.) 2003. Governance and public sector reform in Asia: Paradigm shifts or business as usual?. London: RoutledgeCurzon.
Dahrendorf, R. 1968. Society and democracy in Germany. London: Weidenfeld & Nicolson.
Dango, G. A. 1998. Entrepreneurs: Winning the future. Manila: Entrepreneurs Institute of the Philippines.
Dauvergne, P. (Ed.). 1998. Weak and strong states in Asia-Pacific societies. St. Leonards: Allen & Unwin Australia.
Deyo, F. C. (Ed.). 1987. The political economy of the new Asian industrialism. Ithaca: Cornell University Press.
Deyo, F. C. 1989. Beneath the miracle: Labor subordination in the new Asian industrialism. Berkeley: University of California Press.
Deyo, F. C. 2001. The social construction of developmental labour systems: South-East Asian industrial restructuring. In G. Rodan, K. Hewison & R. Robinson (Eds.). The political economy of Southeast Asia: Conflicts, crises, and change: 259–282. Oxford: Oxford University Press.
Dieleman, M., & Sachs, W. 2006. Oscillating between a relationship-based and a market-based approach: The Salim Group. Asia-Pacific Journal of Management, 23(4): 521–536.
DiMaggio, P. J., & Powell, W. W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. In W. W. Powell & P. J. DiMaggio (Eds.). The new institutionalism in organizational analysis: 63–82. Chicago: The University of Chicago Press.
Doner, R. F. 1991. Approaches to the politics of economic growth in Southeast Asia. Journal of Asian Studies, 50(4): 818–849.
Doner, R. F., Ritchie, B. K., & Slater, D. 2005. Systemic vulnerability and the origins of developmental states: Northeast and Southeast Asia in comparative perspective. International Organization, 59(2): 327–361.
Douglas, M. 1986. How institutions think. Syracuse: Syracuse University Press.
Edwards, L., & Roces, M. (Eds.). 2000. Women in Asia. St Leonards: Allen & Unwin.
Elson, R. E. 1994. Village Java under the cultivation system, 1830–70. Sydney: Allen & Unwin.
Evers, H. D. 1987. The bureaucratization of Southeast Asia. Comparative Studies in Society and History, 29(4): 666–685.
Gomez, E. T. (Ed.). 2002. Political business in Asia. London: Routledge.
Gomez, E. T., & Jomo, K. S. 1997. Malaysia’s political economy: Politics, patronage and profits. Cambridge: Cambridge University Press.
Greenfeld, L. 1992. Nationalism: Five roads to modernity. Cambridge: Harvard University Press.
Habir, A. D., Sebastian, E., & Williams, L. (Eds.). 2002. Governance and privatisation in Indonesia. Sydney: Research Institute for Asia and the Pacific, and The Indonesian Institute for Management Development.
Hall, P., & Soskice, D. (Eds.). 2001. Varieties of capitalism: The institutional foundations of comparative advantage. New York: Oxford University Press.
Hawawini, G., Subramanian, V., & Verdin, P. 2003. Is performance driven by industry or firm-specific factors: A new look at the evidence. Strategic Management Journal, 24: 1–16.
Hew, D., & Nee, L. W. (Eds.). 2004. Entrepreneurship and SMEs in Southeast Asia. Singapore: Institute of Southeast Asian Studies.
Hill, H. 1996. The Indonesian economy since 1966: Southeast Asia’s emerging giant. Cambridge: Cambridge University Press.
Ho, J. K. 2000. Cybertigers: How companies in Asia can prosper from e-commerce. Singapore: Prentice Hall/Pearson Education Asia.
Ho, K. L. (Ed.). 2005. Reforming corporate governance in Southeast Asia. Singapore: Institute of Southeast Asian Studies.
Hobday, M. 1995. Innovation in East Asia: The challenge to Japan. Cheltenham and Lyme: Edward Elgar.
Hofstede, G. H. 2007. Asian management in the 21st century. Asia Pacific Journal of Management, 24(4): 411–420.
Hofstede, G. H., & Hofstede, G. J. 2005. Cultures and organizations: Software of the mind. Revised and expanded, 2nd Ed. New York: McGraw-Hill.
Hutchcroft, P. 1998. Booty capitalism: The politics of banking in the Philippines. Ithaca: Cornell University Press.
Jackson, G., & Deeg, R. 2008. Comparing capitalisms: Understanding institutional diversity and its implications for international business. Journal of International Business Studies, 39(4): 540–561.
Jenkins, D. 1998. Javanese king or classic dictator? The Sydney Morning Herald, 22 May.
Jomo, K. S. (Ed.). 1995. Privatizing Malaysia: Rents, rhetoric, realities. Boulder and London: Westview Press.
Keating, P. 2008. The nation builder. The Sydney Morning Herald, 2–3 February.
Koen, C. I. 2005. Comparative international management. London: McGraw-Hill.
Larkin, J. A. 1982. Philippine history reconsidered: A socioeconomic perspective. American Historical Review, 87: 595–628.
Latifah, W. 1999. The NITC/MIMOS Berhad K-economy advanced paper. NITC/MIMOS BERHAD, Kuala Lumpur, June. http://www.nitc.org.my.
Lee, S. H., & Oh, K. K. 2007. Corruption in Asia: Pervasiveness and arbitrariness. Asia Pacific Journal of Management, 24(1): 97–114.
Li, M., Ramaswamy, K., & Pécherot Petitt, B. S. 2006. Business groups and market failures: A focus on vertical and horizontal strategies. Asia Pacific Journal of Management, 23(4): 439–452.
Liang, T. W. 2004. Entrepreneurship development: The necessary conditions. In D. Hew & L. W. Nee (Eds.). Entrepreneurship and SMEs in Southeast Asia: 7–23. Singapore: Institute of Southeast Asian Studies.
Lindsay, T., & Dick, H. (Eds.). 2004. Corruption in Asia: Rethinking the governance paradigm. Annandale: Federation Press.
Mahathir, M. 1991. Malaysia: The way forward. Kuala Lumpur: Malaysian Business Council.
Marcos, F. 1978. Revolution from the center: How the Philippines is using martial law to build a new society. Hong Kong: Raya.
Mathews, J. A. 2006. Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1): 5–27.
Mathews, J. A., & Cho, D. S. 2000. Tiger technology: The creation of a semiconductor industry in East Asia. Cambridge: Cambridge University Press.
McCoy, A. W. (Ed.). 1994. An anarchy of families: State and family in the Philippines. Madison: Center for Southeast Asian Studies, University of Wisconsin–Madison.
McGregor, K. E. 2007. History in uniform: Military ideology and the construction of Indonesia’s past. Honolulu: University of Hawai’i Press.
McVey, R. 1992. The materialization of the Southeast Asian entrepreneur. In R. McVey (Ed.). Southeast Asian capitalists. Cornell Southeast Asia Program: 7–34. Ithaca: Cornell University Press.
Mendoza, B., & Llanto, G. 2004. Government’s role in developing entrepreneurship and SMEs in the Philippines. In D. Hew & L. W. Nee (Eds.). Entrepreneurship and SMEs in Southeast Asia: 150–174. Singapore: Institute of Southeast Asian Studies.
Migdal, J. S. 1988. Strong societies and weak states: State-society relations and state capabilities in the Third World. Princeton: Princeton University Press.
Moore, B. 1966. Social origins of dictatorship and democracy: Lord and peasant in the making of the modern world. Harmonsworth: Penguin.
Moore, M. 2002. Indonesia’s new military chief hopes to be hammer of Aceh. The Sydney Morning Herald, 30 August–1 September.
Narayanan, V. K., & Fahey, L. 2005. The relevance of the institutional underpinnings of Porter’s five forces framework to emerging economies: An epistemological analysis. Journal of Management Studies, 42: 207–223.
Oon, K. C. 1986. The politics of oil in Indonesia: Foreign company–host government relations. Cambridge: Cambridge University Press.
Painter, M. 2001. Public sector challenges and government reforms in South East Asia. Sydney: Research Institute for Asia and the Pacific.
Pasuk, P., & Baker, C. 1995. Thailand: Economy and politics. Kuala Lumpur: Oxford University Press.
Peng, M. W., Wang, D. Y. L., & Jiang, Y. 2007. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39(5):920–936.
Penrose, E. T. 1959. The theory of the growth of the firm. Oxford: Blackwell.
Porter, M. E. 1980. Competitive strategy. New York: The Free.
Porter, M. E. 1990. The competitive advantage of nations. New York: The Free.
Quah, J. T. 1999. Corruption in Asian countries: Can it be minimized?. Public Administrative Review, 59(6): 483–494.
Rahim, L. Z. 1998. The Singapore dilemma: The political and educational marginality of the Malay community. Kuala Lumpur: Oxford University Press.
Redding, S. G. 2005. The thick description and comparison of societal systems of capitalism. Journal of International Business Studies, 36(2): 123–155.
Reid, A. 1980. Indonesia: From briefcase to samurai sword. In A. W. McCoy (Ed.). Southeast Asia under Japanese occupation. Monograph Series No. 22: 16–32. New Haven: Yale University Southeast Asia Studies.
Rerceretnam, M. 2003. The Christian Indian community in Malaya/Malaysia since 1890. PhD thesis, University of Sydney.
Ricklefs, M. C. 1993. A history of modern Indonesia since c. 1300. 2nd Ed. Houndmills: Macmillan.
Ritchie, B. K. 2007. Is economic development probable? Labor and skills formation in a state-coordinated, liberal market economy. Paper presented at Asia Pacific Journal of Management Special Issue Conference on “Varieties of Asian Capitalism: Indigenization and Internationalization,” 10–12 December, Brisbane, Australia.
SarDesai, D. R. 1994. Southeast Asia: Past and present. 3rd Ed. Boulder: Westview, and Houndmills: Macmillan.
Schumpeter, J. A. 1934. The theory of economic development. New York: Oxford University Press.
Schwarz, A. 1994. A nation in waiting: Indonesia in the 1990s. Boulder: Westview.
Scott, W. R. 2001. Institutions and organizations. 2nd Ed. Thousand Oaks, CA: Sage.
Searle, P. 1999. The riddle of Malaysian capitalism: Rent-seekers or real capitalists?. Sydney: Allen & Unwin, and Honolulu: University of Hawai’i Press.
Sears, L. J. (Ed.). 1996. Fantasizing the feminine in Indonesia. Durham and London: Duke University Press.
Sirman, D. G., Hitt, M. A., & Ireland, R. D. 2007. Managing resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32(1): 273–292.
Sloane, P. 1999. Islam, modernity and entrepreneurship among the Malays. Houndmills: Macmillan.
Smith, A. D. 1986. The ethnic origins of nations. Oxford: Blackwell.
So, A. Y., & Chiu, S. W. K. 1995. East Asia and the world economy. Thousand Oaks: Sage.
Steinberg, D. J., et al. 1987. In search of Southeast Asia: A modern history. Revised Ed. Honolulu: University of Hawaii Press, and St. Leonards: Allen & Unwin.
Straits Times Interactive. 2002. Malaysian PM laments skewed religious views and ‘crutches.’ 31 July.
Strassler, K. 2008. Cosmopolitan visions: Ethnic Chinese and the photographic imagining of Indonesia in the late colonial and early postcolonial periods. The Journal of Asian Studies, 67(2): 395–432.
Tangkitvanich, S. 2004. SME development in Thailand’s automotive industry. In D. Hew & L. W. Nee (Eds.). Entrepreneurship and SMEs in Southeast Asia: 206–220. Singapore: Institute of Southeast Asian Studies.
Temasek Holdings. http://temasekholdings.com.sg.
Theobald, R. 1990. Corruption, development, and underdevelopment. Basingstoke: Macmillan.
Thompson, A. G. 1989. Cross-cultural management of labour in a Thai environment. Asia-Pacific Journal of Management, 6(2): 232–338.
Tipton, F. B. 1995. Nationalism and economic development in nineteenth century Europe. In A. Czarnota, H. Koscharsky & A. Pavkovic (Eds.). Nationalism and postcommunism: 19–37. Aldershot: Darmouth.
Tipton, F. B. 1998. The rise of Asia: Politics, economics and society in contemporary Asia. Basingstoke: Macmillan.
Tipton, F. B. 2002a. Alleviating the digital divide: Policy recommendations—Malaysia, Thailand, the Philippines, Vietnam. Sydney: Research Institute for Asia and the Pacific.
Tipton, F. B. 2002b. Japanese nationalism in comparative perspective. In S. Wilson (Ed.). Nation and nationalism in Japan: 146–162. London: RoutledgeCurzon.
Tipton, F. B. 2002c. Bridging the digital divide in Southeast Asia: Pilot agencies and policy implementation in Thailand, Malaysia, Vietnam, and the Philippines. ASEAN Economic Bulletin, 19(1): 83–99.
Tipton, F. B. 2005. Matching desires with expectations: Southeast Asian policies to attract foreign investment. In B. Pritchard et al. (Eds.). Regulating foreign direct investment: Southeast Asia at the crossroads: 139–154. Sydney: Research Institute for Asia and the Pacific.
Tipton, F. B. 2008a. Asian firms: History, institutions, and management. London: Edward Elgar.
Tipton, F. B. 2008b. The impact of China on the electrical and electronics industry in Southeast Asia. In A. D. Welch and D. Jarvis (Eds.). ASEAN industries and the challenge from China: The dragon and the tiger cubs. London: Palgrave, in press.
Tipton, F. B., Jarvis, D., & Welch, A. 2003. Re-defining the borders between public and private in Southeast Asia: Malaysia, Philippines, Vietnam, Thailand and Indonesia. Financial sector, telecommunications, information and communications technologies, higher education. Sydney: Research Institute for Asia and the Pacific.
Transparency International. Global Corruption Report (including corruption perception index and bribe payers index, annual). http://www.transparency.org.
Trocki, C. A. 1992. Political structures in the nineteenth and early twentieth centuries. In N. Tarling (Ed.). The Cambridge history of Southeast Asia, vol. 2: The nineteenth and twentieth centuries: 79–130. Cambridge: Cambridge University Press.
Trounson, A. 2007. Thai troubles take shine off gold miner. The Australian, 4 December.
Tsui-Auch, L. S., & Lee, Y. J. 2003. The state matters: Management models of Singaporean Chinese and Korean business groups. Organization Studies, 24(4): 507–534.
USNCE (United States, National Commission on Entrepreneurship). 2002. American formula for growth: Federal policy and the entrepreneurial economy, 1858–1998. Washington, DC: NCE.
Valayutham, S. 2007. Responding to globalization: Nation, culture and identity in Singapore. Singapore: Institute of Southeast Asian Studies.
Wade, R. 1990. Governing the market: Economic theory and the role of government in East Asian industrialization. Princeton: Princeton University Press.
Wedeman, A. 2002. Development and corruption: The East Asian paradox. In E. T. Gomez (Ed.). Political business in Asia: 34–61. London: Routledge.
Welch, A. R. 2007. Governance issues in South East Asian higher education. Finance, devolution and transparency in the global era. Asia Pacific Journal of Education, in press.
Wernerfelt, B. 1984. A resource-based view of the firm. Strategic Management Journal, 4: 171–180.
White, S. 2004. Stakeholders, structure, and the failure of corporate governance reform initiatives in post-crisis Thailand. Asia Pacific Journal of Management, 21(2): 130–122.
Whitley, R. D. 1992. Business systems in East Asia: Firms, markets, and societies. London: Sage.
Whitley, R. D. 1999a. Divergent capitalisms: The social structuring and change of business systems. Oxford: Oxford University Press.
Whitley, R. D. 1999b. Competing logics and units of analysis in the comparative study of economic organization. International Studies of Management and Organization, 29(2): 113–126.
Whitley, R. D. 2005. Changing capitalisms? Internationalization, institutional change, and systems of economic organization. Oxford: Oxford University Press.
World Bank. 2004. Doing business 2004: Understanding regulation. Washington, DC: World Bank and Oxford University Press.
Yeung, H. W.-C. 2002. Entrepreneurship and the internationalisation of Asian firms. Cheltenham and Northampton: Edward Elgar.
Yeung, H. W.-C. 2006. Change and continuity in Southeast Asian ethnic Chinese business. Asia Pacific Journal of Management, 23:229–254.
Yoshihara, K. 1988. The rise of ersatz capitalism in South-East Asia. Singapore: Oxford University Press.
Yuan, L. T., & Low, L. 1990. Local entrepreneurship in Singapore: Private and state. Singapore: Times Academic.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Tipton, F.B. Southeast Asian capitalism: History, institutions, states, and firms. Asia Pac J Manag 26, 401–434 (2009). https://doi.org/10.1007/s10490-008-9118-z
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10490-008-9118-z