Business Systems and Corporate Governance

The paper tests the applicability of Whitley’ s business systems framework to the study of international differences in corporate ownership structure. In support of Whitley’ s framework we document the existence of large differences among the largest companies in 12 European nations. Furthermore we find that these differences can be partly attributed to the institutional determinants stressed by Whitley: structure of the financial system, government regulation and labour relations. However, we also find evidence of microeconomic effects attributable to firm size and industry structure which cut across national borders and which influence cross country variations in ownership structure. We conclude that ownership structures are influenced by both economic and system effects.