Moving beyond the dichotomy of Hall & Soskice (2001): the State's Role in economic growth

Varieties of Capitalism (VoC) has broadened the prevalent understanding of market mechanisms, although some criticisms have been raised. Despite extensive research on VoC, few studies have empirically expanded the VoC framework and its relationship with economic growth. In this study, state involvement in the market is additionally considered as an axis, and the thirdtype of market economy, in which the state influences the market, is empirically captured. Moreover, this study examines the nonlinearity and dynamic stability of the factors constituting VoC. In the expanded framework, state involvement is a significant positive contributor to economic growth even in developed countries, and it creates synergy when combined with labor relations. Labor protection is also confirmed to work positively for economic growth up to a certain level. This study reflects real economies and empirically supports the discourse on the state's role in the market for economic growth. (c) 2021 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.

Automated summary

This study expands the framework of varieties of capitalism by considering the role of the state in the market, and empirically proves the positive impact of state involvement on economic growth, especially when combined with labor relations.