Topic
Co-determination
About: Co-determination is a research topic. Over the lifetime, 92 publications have been published within this topic receiving 2052 citations.
Papers published on a yearly basis
Papers
TL;DR: In this article, the authors describe some of these changes and try to assess the dynamics of this change process and show that the limited role of the equity market for company financing and for private household savings still provides a very narrow base for a shareholder value economy in Germany.
Abstract: The German political economy has often been cited as a classical case of non-shareholder value orientation. Its productionist, long-term, consensus orientation has often been contrasted with the 'Anglo-Saxon approach'. The influence of shareholders who press for shareholder value and the importance of the equity market have traditionally been low. But there are signs of change. In this article we describe some of these changes and try to assess the dynamics of this change process. First we show that the limited role of the equity market for company financing and for private household savings still provides a very narrow base for a shareholder value economy in Germany. The central pillars of the German system of corporate governance - the dominating role of banks, the system of co-determination and the company centred management system - are not crumbling. Change in the direction of shareholder value is therefore limited.
333 citations
TL;DR: The authors empirically investigated the implications of this sort of labor participation in corporate decision making, and found that companies with equal representation of employees and shareholders on the supervisory board trade at a 31% stock market discount as compared with companies where employee representatives fill only one-third of the board seats.
Abstract: Under the German corporate governance system of codetermination, employees are legally allocated control rights over corporate assets through seats on the supervisory board—that is, the board of nonexecutive directors. The supervisory board oversees the management board—the board of executive directors—approves or rejects its decisions, and appoints its members and sets their salaries. We empirically investigate the implications of this sort of labor participation in corporate decision making. We find that companies with equal representation of employees and shareholders on the supervisory board trade at a 31% stock market discount as compared with companies where employee representatives fill only one-third of the supervisory board seats. We show that under equal representation, management board compensation provides incentives that are not conducive to furthering shareholders' interests, possibly because labor maximizes a different objective function than shareholders. We document that, under equal representation, companies have longer payrolls than their one-third representation peers have. Finally, we provide evidence that shareholders respond to the allocation of control rights to labor by linking supervisory board compensation to firm performance and by leveraging up the firm. (JEL: G32, G34)
320 citations
TL;DR: The success of West German, Scandinavian and Japanese economies, particularly when compared with lagging productivity and competitiveness of the U.S. and U.K., have focused attention on comparative institutions in labour markets and corporate control.
Abstract: The success of West German, Scandinavian and Japanese economies, particularly when compared with lagging productivity and competitiveness of the U.S. and the U.K., have focused attention on comparative institutions in labour markets and corporate control. Declining unions and increasing reliance on competitive market pressures in the AngloAmerican countries contrast with more state intervention and regulation of the European "social market economies". As noted by Henzler (1992,
148 citations
TL;DR: In this article, the authors argue that despite important reforms and substantial changes of individual elements of the German corporate governance system, the main characteristics of the traditional German system as a whole are still in place.
Abstract: The German corporate governance system has long been cited as the standard example of an insider-controlled and stakeholder-oriented system. We argue that despite important reforms and substantial changes of individual elements of the German corporate governance system, the main characteristics of the traditional German system as a whole are still in place. However, in our opinion the changing role of big universal banks in governance undermines the stability of the corporate governance system in Germany. Therefore a breakdown of the traditional system leading to a control vacuum or a fundamental change to a capital market-based system could be in the offing.
134 citations
TL;DR: In this article, the authors provide an overview of the German corporate governance system and discuss the importance of mergers and acquisitions, the market in block trades, and the lack of a hostile takeover market.
81 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 3 |
| 2019 | 7 |
| 2018 | 1 |
| 2017 | 4 |
| 2016 | 3 |
| 2015 | 4 |