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Culture and Institutions: An Empirical Study of Executive Rationale in Germany and Japan

Working Paper
This paper contributes rare primary empirical evidence to one of the major research questions in the social sciences today, namely, the linkage between national cultures and institutional structures of national business systems. Drawing on the work of Redding (2005), the authors explore the thinking, or “rationale,” of senior executives of leading German and Japanese firms about the ideal structure of the economy. The authors find considerable variation in rationale across the two countries and in comparison with the shape of the business system of the United States. This study has implications for our understanding of the meaning of economic activity in different countries and of the evolutionary trajectories of national business systems.