Introduction Due to the rapid process of globalization, the question of whether socioeconomic institutions and policies are converging or diverging across different nations has become controversial. Various literatures on comparative institutional studies have been developed, in which Hall and Soskice's (2001) Varieties of Capitalism approach is one of the most significant concepts widely discussed. According to Hall and Thelen (2005), “varieties of capitalism” represent a firm-centered approach in which the firm is positioned as a key actor and is considered relational. It highlights the concept of institutional complementarity, according to which “…one set of institutions is complementary to another when its presence increases the returns available from the other” (Hall and Gingerich, 2004, p.6). Furthermore, the development of relationships between businesses and five other areas – industrial relations, professional training and education, corporate governance, business-employee relations – is essential to ensure coordination to maintain skills (Hall and Soskice, 2001). According to Knell and Srholec (2005), the variety of literature on capitalism has mainly distinguished and identified two types of coordination: liberal market economies (LMEs) and coordinated market economies (CMEs), where competitive markets are dominant in the LMES while CMEs are primarily based on strategic interaction. Using the UK as an example of LME and Germany as an example of ECM, this essay will consider the implications of 'varieties of capitalism' (VoC) for the financial structures and labor relations of their respective economies. The definition of institutional complementarity will be outlined in the first paragraph, while the implications in...... middle of the paper ......s: Coordinated and non-coordinated market economies in the 1980s and 1990s' In Kitschelt H , Lange P, Marks G and Stephens J (eds) Continuity and Change in Contemporary Capitalism New York, Cambridge University PressSternberg, R. and Kiese, M. and Stockinger, D. (2008) 'Cluster politics in the US and Germany : varieties of capitalism's perspective on two high-tech states 'Environment and Planning C: Government and Politics 2010, 28, pp.1063-1082Streeck, W. (1992) Social Institutions and Economic Performance, Beverly Hills, Sage PublicationThelen, K. (2001) 'Varieties of labor policies in developed democracies', in Hall, Peter A.; Soskice, David (ed.) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, pp. 71–103. New York: Oxford University Press Witt, MA (2010) “China: What Variety of Capitalism?” working paper, INSEAD