Recently I assigned my students to identify the nationality of different global companies. The results were interesting. No matter what information they looked at– from the nationality of CEOs and managers, to the location of most employees– major global companies had clearly identifiable nationality even when the majority of sales were abroad. Some companies seemed to try to hide their background when marketing abroad–hello, did you know T Mobile is DeutscheTelekom? Most of my students didn’t– but their actual operations remained culturally distinct. This not a new observation (see the work from a decade ago of my grad school pals Doremus, Keller, Pauly and Reich), but the myth of the global corporation persists. I’m pretty sure my students were surprised by the results.

Does it matter? Well, Clay Ramsay recently brought to my attention a Financial Times article about why Canada is not suffering a big financial crisis. One reason: Canadian bankers are “either too nice or too dull to indulge in the no-holds-barred capitalism that created such a boom, and such a bust, in more aggressive societies.” And, don’t we wish American bankers would act a little more…well, Canadian?

For a long time now, there has been talk of a borderless world in which global corporations are untied from the shackles of their national base–from Kenichi Omae writing two decades ago to Thomas Friedman today. But apparently, Canadian banks are very… Canadian: as one investment banker tells it, Canadians have a “being nice” institutional culture, where decorum, amiability, and collegiality are important values. In other words, these are not the selfish risk-taking sharks that are likely to take down the global financial system. The Canadian government did not have to bail out its financial sector, and the Canadian banking system is rated the world’s soundest. In other words, Canadian corporate culture mattered big time.

Chrystia Freeland, the author of the FT article, starts with corporate culture, but then goes on to make an institutional argument, too. She points to the comprehensive, effective, and yet not too heavy-handed Canadian regulatory system, especially when it comes to mortgages. And the bankers mostly went along with it.

Aha, you say, then what we needed was more regulation! But the debates in the US over regulatory failures typically focuses on too much regulation (e.g. US government efforts to expand home ownership led to massive subprime lending; but see this interesting article on contrary evidence). OR perhaps it was the total lack of regulation of speculative hedge funds (which were not regulated because policymakers thought that people who invest millons of dollars know what they are doing–I’m not joking, that really is the reason policymakers give for not regulating…)

Getting back to corporate culture, I think the Canadian regulatory framework made a huge difference… but, and here’s the hitch: American corporate culture makes it very difficult if not impossible to replicate it in the US. From the perspective of scholarship, institutions and culture are not opposing explanations, but intertwined. From the perspective of policymaking, well, I guess I should start hiding my meagre pots of money under the bed, ready for the next financial crisis….