Abstract/Summary

This article contributes to the understanding of the role of European governments in fostering new global players in the utilities. We argue that the international growth of firms stems from their interaction with governments, which act not only as rule setters but also as goal-oriented strategists, through public policies and mechanisms ranging from firm ownership to more indirect intervention designed to promote internationalization. We claim that the outcome of the interaction significantly depends on the country's form of capitalism. The particular form of capitalism manifested in a country is deeply rooted in historical and cultural behavioural models and differs according to path-dependent institutional changes. Our conjectures are empirically supported by a comparative analysis of the international growth of previously inward-looking domestic incumbents in the European energy and telecommunications industries over the last 15 years.