Investigating Commonalities and Changes in Labor and Financial Relations in East Asia

Abstract

This paper contributes to the discussion on East Asian capitalism as a distinct and path dependent economic model. Taking the discussion on the "varieties of capitalism" (VoC) as a departure point, we distinguish East Asian capitalism from Anglo-American liberal market economies and European coordinated market economies. We show that the core East Asian capitalist countries Japan, Korea and China follow a coordinated approach in business-finance relations, while business-labor affairs remain largely uncoordinated. These findings identify some limitations of the classic VoC approach, which is based on the dichotomy of the liberal and the coordinated model as well as the hypothesis of institutional complementarity. The second contribution of this paper is to investigate the changes in the above-described two-dimensional relationships. We find that there is no clear trend and few evidences that East Asian countries have been converging with an Anglo-American liberal model of managing economic relations.