Diversity of Capitalism in Central-Eastern and Western European Countries: Robustness of Results Based on Different Coefficients of Similarity
Purpose: the paper compares the institutional environment of product market competition of 11 Central and Eastern European (CEE) countries against 4 Western European models of capitalism (continental, Mediterranean, Scandinavian, and Anglo-Saxon). Design/Methodology/Approach: The analysis covers 24 variables and the 2005-2018 period. The aim is to analyze the robustness of results against a specific Western European country, which is a reference point, and the exact method of calculating the similarity coefficient. The analysis shows that the CEE countries are the most similar to the Mediterranean model of capitalism. The continental model ranks second. Findings: The results are highly robust to the assumptions made. High institutional convergence of the CEE countries was seen in both Spain and Italy. The classification of Western European models of capitalism in terms of proximity to the CEE countries is also robust to the exact method of calculating the similarity coefficient. Practical Implications: The study yields practical implications for policymakers as it indicates the institutional development of given CEE countries against the background of Western Europe. On this basis, policymakers can choose actions according to their peers in the given reference country, which is the most akin. Originality/Value: The originality of the research lies in the assessment of the model of capitalism prevailing in the CEE countries and the way of comparing institutional environment of the two countries based on our original concept of the similarity coefficient, which is constructed according to the mathematical measures of distance between the objects.