Multiple-input multiple-output (MIMO) systems can provide significant increments in capacity; however, the capacity of MIMO systems degrades severely when spatial correlation among multipath channels is present. This paper demonstrates that the influence of shadowing on the channel capacity is more substantial than that of multipath fading; therefore, the shadowing effect is actually the dominant impairment. To overcome the composite fading effects, we propose combining macroscopic selection diversity (MSD) schemes with MIMO technology. To analyze the system performance, the capacity outage expression of MIMO-based MSD (MSD-MIMO) systems using a characteristic function is applied. The analytic results show that there are significant improvements when MSD schemes are applied, even for the two-base-station diversity case. It is also observed that the effect of spatial correlation due to multipath fading is almost negligible when multiple base stations cooperatively participate in the mobile communication topology.