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The Evolution of institutions of capital

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Financial capital is analyzed here in terms of the variation between societies in its sourcing, channeling and use. The aim is to consider the clustering of patterns of such behaviors into 'types' for use in the comparative analysis of business systems. The sourcing of capital is seen in terms of the institutions in use and the degree of reliance on them as it varies societally. The channeling of capital for use in the economy is considered in terms of two broad categories of approach: the arm's-length and the integrated. Thought is then given to the surrounding complementarities with other features of economies, such as labor. Categories of financial systems are described, taking account of variations in the structure of supplier, intermediary, and end-user relations. Reference is made to Zysman's proposal for three main types, and within them, to the roles of government, finance and industry links, significant markets, and the dominant pricing mechanism. The implications of these forces for organizational behavior are considered.

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