Arbeitspapier

The Swedish Model of Corporate Ownership and Control in Transition

We analyze the development of the Swedish ownership model after World War II. The controlling ownership in Swedish firms is typically concentrated to one or two owners. Often, but not always, the controlling owners are Swedish families. Thus, the model resembles the typical corporate control model of Continental Europe. A distinguishing feature of the Swedish model is that control is typically based on a smaller capital base than in other European countries. This feature is a result of a seemingly paradoxical policy concerning private ownership. Tax policy has consistently disfavored the accumulation of private wealth, but at the same time corporate law has greatly facilitated the wielding of control based on a small equity base.

Our analysis shows that the large gap between ownership and control makes the Swedish corporate control model both politically and economically unstable.

The major political threat to date has been the proposal of the Swedish Trade Union Congress (the LO) and the Social Democratic Party to introduce a scheme that would result in the gradual takeover of the Swedish corporate sector by union-controlled wage-earner funds.

After the political defeat of this proposal in the 1980s economic policy was changed in a more market liberal direction. This policy change has uncovered the economic instability of the model. The weak financial base of the controlling owners makes it difficult for them to take an active part in the current international restructuring of the corporate sector. Two forces are now seen as the major threat to the Swedish ownership model: (a) a rapidly increasing foreign takeover of Swedish firms and (b) large state and corporatist pension funds. Their financial assets are far larger than those of todays dominant control owners and extensive mandatory and/or tax-favored systems for pensions saving ascertain that their relative financial strength will continue to grow sharply in the future.

Language: Englisch

Bibliographic citation: Series: IUI Working Paper ; No. 593

Classification: Wirtschaft
New Firms; Startups
Economic History: Financial Markets and Institutions: Europe: 1913-
Technological Change: Government Policy
Capitalist Systems: Political Economy

Subject: Corporate control
Corporate governance
Corporatism
Entrepreneurship
Ownership policy
Ownership structure
Swedish Model
Eigentümerstruktur
Corporate Governance
Schweden

Event: Geistige Schöpfung

(who): Henrekson, Magnus
Jakobsson, Ulf

Event: Veröffentlichung

(who): The Research Institute of Industrial Economics (IUI)

(where): Stockholm

(when): 2003

Handle: http://hdl.handle.net/10419/81191

Last update: 10.03.2025, 11:41 AM CET

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Object type

Arbeitspapier

Associated

Henrekson, Magnus
Jakobsson, Ulf
The Research Institute of Industrial Economics (IUI)

Time of origin

2003

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Arbeitspapier