Varieties of Capitalism: The Institutional Foundations of Comparative Advantage is a book edited by political economists Peter A. Hall and David Soskice. In their sizable introductory chapter Hall and Soskice set out two distinct types of capitalist economies: liberal market economies (LME) (e.g., U.S., U.K., Canada, Australia, New Zealand, Ireland) and coordinated market economies (CME) (e.g. Germany, Japan, Sweden, Austria). Those two types can be distinguished by the primary way in which firms coordinate with each other and other actors, such as trade unions. In LMEs firms primarily coordinate their endeavours by way of hierarchies and market mechanisms. Coordinated market economies rely more heavily on non-market forms of interaction in the coordination of their relationships with other actors. They considered 5 spheres in which firms must develop relationships with others:
1.  Industrial relations - Companies have to coordinate with their workers, trade unions and other employers over wage and productivity. CMEs generally have a higher level of membership in trade unions and employers organizations and bargaining over wages tends to happen at the industry, sectoral or national level. Conversely in LMEs workers and employers are often less organized and wage negotiations take place at the company level. 2.  vocational training and education - In CMEs workers tend to have specific skills that are tied to the firm or the industry their working in. In LMEs workers have more general skills that easily can be used to work at other companies. 3. corporate governance - Firms in CMEs rely more on patient capital, i.e. capital that doesn't totally depend on financial openness and short term return on investment. LMEs tend to rely more heavily on public information about finances and short-term capital, such as stockmarkets. 4. Inter-firm relations - Inter-firm relations in CMEs tend to be more collaborative, while inter-firm relations in LMEs are more competitive and arms-length. 5. Relations with employees - In CMEs managers often have to cooperate with employees to reach major decisions, while in LMEs there is often a more adverserial relation between management and employee in which managers are the prime decision-makers.