The of capitalism exhibit institutional advantages that are derived

The varieties of capitalism approach provides a most influential perspective in recent research on comparative capitalisms. It takes the relationship between firms and their institutional environment as an analytical point of departure; a perspective that is shared by related efforts in research on comparative capitalisms such as the business systems and the systems of innovation approaches. More specifically, however, the varieties of capitalism framework operates on the conceptual basis of an ideal typical dichotomy that contrasts the hegemonic logic of market relations in liberal market economies such as the United States with an augmented setting of market and non-market relations that informs coordinated market economies such as Germany. Both these ideal typical varieties of capitalism exhibit institutional advantages that are derived from the specific combination of market and non-market patterns in the coordination of complementary institutional subsystems, involving corporate governance, labour relations, finance, inter-firm relations, education and training, and technological innovation. Liberal economies exhibit short-term company finance, deregulated labour markets, generalized education and strong inter-company competition in technology transfer with advantages in radical technological innovation. Coordinated market economies display characteristics such as long-term finance, cooperative industrial relations, firm-sponsored vocational training and inter-company cooperation in technology transfer with advantages in incremental innovations. The dynamics of institutional stability and change in these varieties of capitalism are driven by efficiencyenhancing systemic complementarities across industries, sectors and policy fields and thus outline a gradually adaptive character of institutional evolution (HALL and SOSKICE, 2001). The conceptual insistence on the empirical validity of the conceptual dichotomy of liberal and coordinated market economies underlines a problematic neglect of internal diversity in the varieties of capitalism approach. Obviously, any stylization of national development