Working Paper Series
The Swedish Model of Corporate Ownership and Control in Transition
() and Ulf Jakobsson
Abstract: 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
After the political defeat of this proposal in the
1980’s 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 today’s 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.
Keywords: Corporate control; Corporate governance; Corporatism; Entrepreneurship; Ownership policy; Ownership structure; Swedish Model; (follow links to similar papers)
JEL-Codes: M13; N24; O38; P16; (follow links to similar papers)
63 pages, April 15, 2003
This paper was presented at the conference Who will own Europe? The internationalization of asset ownership in the EU today and in the future, arranged by the European Commission (DGECFIN), Brussels, February 27-28, 2003.
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
- This paper is published as:
Henrekson, Magnus and Ulf Jakobsson, (2005), 'The Swedish Model of Corporate Ownership and Control in Transition' in Huizinga, Harry and Lars Jonung (eds.) Who Will Own Europe? The Internationalisation of Asset Ownership in Europe, pages 207-246, Cambridge University Press.
Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom