The Role of Financialized Loss-Making Companies of a Science-Based Industry in the Hybridization of Capitalisms: The Case of the Biotech Industry in France Versus the UK
Comparative capitalism (CC) studies focus on the links between firms’ innovative capabilities on the one hand, and corporate governance and financial systems, inter-firm networks, labour market regimes, the state and qualities of education and training programmes on the other (Allen, 2013). Within the CC literature, the varieties of capitalism (VOC) (Hall & Soskice, 2001) framework has emerged as an influential version of idea that sector-specific competitive advantages of companies and countries depend to a significant extent on country-specific institutional conditions (Schneider & Paunescu, 2012). Importantly, complementarities in these institutional configurations lead to systematic differences between Coordinated Market Economies (CMEs) and Liberal Market Economies (LME) (Schneider & Paunescu, 2012). These complementarities, defined as the systematic combinations of particular institutions are viewed as remaining stable over time. Such stability arises from the fact that investments are channelled into economic activities involving either radical or incremental innovation, in which the specific institutions grant comparative advantage. In turn, these investments reinforce existing institutions with the result that institutional configurations tend to gravitate to either the CME or LME model. The important phenomena of path-dependent institutional change (Thelen, 1999) and institutional complementarities (Aoki, 2001; Amable, Ernst and Palombarini, 2002; Amable, 2003) tend to lead to stability and reproduction of systemic relations between institutions in different economies.
In this paper, we question the LME/CME typology at a sectoral level in particular, because of the specificities of the science-based industry (e.g. Pisano, 2010) by comparing the institutional characteristics and business models of French biotech industry to those of the UK. We analyse a possible hybridization of capitalisms through sectoral constraints to ensure the long run survival of innovative SMEs. We then conclude as to relevance of the VoC as explored in later debates for a science-based industry such as biotech.
Key words: comparative capitalisms, path-dependency, science-based industry.
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