Varieties of Capitalism, Competition, and Prosocial Corporate Purposes

The literature on varieties of capitalism identifies two “species” of capitalism around the world and over time: armed capitalism (countries with large public corporations having a corporate governance structure characterized by relatively high power of corporate owners and workers, and with markets having relatively high barriers to entry) and disarmed capitalism (countries with large public corporations that have a corporate governance structure characterized by relatively low power of corporate owners and workers, and with markets that have relatively low barriers to entry). The following research question arises: Which species (if any) of capitalism is expected to be the most likely to pursue and support prosocial corporate purposes? The underlying idea guiding the argumentations in this chapter is that, as large public companies compete in capital, human capital, and product markets, each species of capitalism may (or may not) attract investors, talents, and consumers, including those with attention to prosocial objectives.