Working Paper No. 593

The Swedish Model of Corporate Ownership and Control in Transition

Published: April 15, 2003; revised November, 2003Pages: 63Keywords: Corporate control, Corporate governance, Corporatism, Entrepreneurship, Ownership policy, Ownership structure, Swedish ModelJEL-codes: M13, N24, O38, P16

The Swedish Model of Corporate Ownership and Control in Transition Magnus Henrekson and Ulf Jakobsson

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 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.

Magnus Henrekson


Ph: +46 (0)8 665 4502

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 |