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Taxonomies and Typologies: Starting to Reframe Economic Systems

Bruno, RL; Estrin, S; (2021) Taxonomies and Typologies: Starting to Reframe Economic Systems. In: Douarin, E and Havrylyshyn, O, (eds.) The Palgrave Handbook of Comparative Economics. (pp. 871-896). Palgrave Macmillan: Cham, Switzerland. Green open access

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We propose that it is an important ongoing research agenda to devise a new classification of economic systems based on empirical observation rather than abstract reasoning, and then subject this to the test of empirical validity by exploring whether this taxonomy explains observed behaviour. However, we do not ourselves yet attempt a new classification of economic systems; rather, we draw on the Varieties of Institutional Systems configuration (Fainshmidt, Judge, Aguilera and Smith, 2018) as the basis for our empirical work. We ask whether, holding country-specific institutional factors, sector-specific technological characteristics and ownership-specific firm-level attributes constant, enterprise performance is contingent on the configuration. We test this idea on the World Bank Enterprise Survey of 30,000 firms in more than 57 countries between 2006 and 2016, using a production function methodology. Our proposition that taxonomic systems matter is supported by the evidence. We find that in these understudied economies, systems based on both free market logic and state capitalism achieve equivalent firm-level performance, while systems allowing rent-seeking and cronyism are less efficient. Thus, this new approach allows for system equivalence (equifinality) as well as system superiority.

Type: Book chapter
Title: Taxonomies and Typologies: Starting to Reframe Economic Systems
ISBN-13: 978-3-030-50887-6
Open access status: An open access version is available from UCL Discovery
DOI: 10.1007/978-3-030-50888-3_33
Publisher version: https://doi.org/10.1007/978-3-030-50888-3_33
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Comparative economic systems, Taxonomy, Production function, Understudied economies, Firm-level efficiency
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES
URI: https://discovery.ucl.ac.uk/id/eprint/10121801
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