Learning from the Swiss Corporate Governance Exception

Abstract

Summary The Swiss economy represents an exception to the legal origin theory (e.g., Roe, 2006). Although Switzerland is a country belonging to the civil law family, many of its public companies have diffused corporate ownership, as do those in common law countries. This paper maintains that the Swiss exception relies on the complementarity between corporate ownership and policies addressing employment protection and innovation. The Swiss case presents two lessons. First, the current corporate governance is the result of a long and composite path in which politics plays a pivotal role; second, the institutional differences and similarities across countries, which one would try to explain along with the legal origin theory, can also emerge from politics‐based accounts, such as those referring to policies on employment protection and innovation.

Innovation, on-the-job learning, and labor contracts: an organizational equilibria approach

“…The intuition behind this argument is in line with early institutionalist contributions that place relative emphasis on the structural components of the so-called ‘national systems of innovation’ (Lundvall, 1992; Nelson, 1993; OECD, 1997). Support to such views which emphasize the institutional embeddedness of national innovative capabilities comes from Belloc (2019), who shows that aggregate innovation outcomes are positively affected by the complementarity between employment protection legislation and employee representation legislation, and Vatiero (2017), who shows that country-level innovation is spurred by the complementarity between labor laws and ownership concentration. At a more micro level, but in line with the above studies, Acharya et al .…”

Institutional complementarities between labour laws and innovation

“…Institutional differences and similarities across countries have been found to significantly influence aggregate innovation patterns (e.g. Vatiero, 2017), especially during the unprecedented development of intellectual property rights protection over the last three decades (Gurpinar, 2016). In particular, the relationship between innovation performance and labour laws has been analysed in a small bunch of empirical studies by considering a complex bundle of legal norms commonly referred to as employment protection legislation (EPL), which relates mainly to dismissal restrictions and to the availability of temporary contracts (Acharya et al , 2013, 2014; Griffith and Macartney, 2014).…”