IDEAS home Printed from https://ideas.repec.org/a/nms/wsimit/10.5771-0342-300x-2021-2-87.html
   My bibliography  Save this article

Unternehmensmitbestimmung und langfristige Investitionen in deutschen Unternehmen

Author

Listed:
  • Vitols, Sigurt
  • Scholz, Robert

Abstract

A recurring debate in the academic community and among policymakers is whether financial markets are plagued by short-termism. Short-term investors pressure the companies they are investing in to pay out available resources in the form of stock buybacks or increased dividends, rather than investing in long-term projects, even when such long-term investments are expected to be quite profitable in the future. However, there has been hardly any investigation into the influence that board-level employee representation (or BLER for short) may have on company investment policies. This article makes two contributions to the literature. First, it uses a unique six-component measure of codetermination strength in German companies, the Mitbestimmungsindex (MB-ix), which is a very differentiated indicator for worker influence in corporate governance than most quantitative studies. Second, robust regression models are used to deal with the strong influence of extreme outliers in the data. Based on a sample of more than 200 companies listed on the German stock market between 2006 and 2018, it is shown that the strength of BLER (as measured by the MB-ix) is significantly (and positively) related to the rate of capital investment.

Suggested Citation

  • Vitols, Sigurt & Scholz, Robert, 2021. "Unternehmensmitbestimmung und langfristige Investitionen in deutschen Unternehmen," WSI-Mitteilungen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 74(2), pages 87-97.
    • Handle: RePEc:nms:wsimit:10.5771/0342-300x-2021-2-87
    DOI: 10.5771/0342-300X-2021-2-87
    as

    Download full text from publisher

    File URL: https://www.nomos-elibrary.de/10.5771/0342-300X-2021-2-87
    Download Restriction: no
    File URL: https://libkey.io/10.5771/0342-300X-2021-2-87?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Benelli, Giuseppe & Loderer, Claudio & Lys, Thomas, 1987. "Labor Participation in Corporate Policy-Making Decisions: West Germany's Experience with Codetermination," The Journal of Business, University of Chicago Press, vol. 60(4), pages 553-575, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arno Brandt & Hagen Krämer, 2022. "Deindustrialisierung, Transformation und eine moderne Industriepolitik [Deindustrialisation, Transformation and a Modern Industrial Policy]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 102(12), pages 918-921, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gary Gorton & Frank Schmid, 2000. "Class Struggle Inside the Firm: A Study of German Codetermination," NBER Working Papers 7945, National Bureau of Economic Research, Inc.
    2. Becht, Marco & Bolton, Patrick & Roell, Ailsa, 2003. "Corporate governance and control," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 1, pages 1-109, Elsevier.
    3. Franziska Boneberg, 2010. "The Economic Consequences of one-third Codetermination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data," Working Paper Series in Economics 177, University of Lüneburg, Institute of Economics.
    4. Guidi, Marco G.D. & Hillier, Joe & Tarbert, Heather, 2010. "Successfully reshaping the ownership relationship by reducing ‘moral debt’ and justly distributing residual claims: The cases from Scott Bader Commonwealth and the John Lewis Partnership," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 21(4), pages 318-328.
    5. Felix FitzRoy & Kornelius Kraft, 2005. "Co‐determination, Efficiency and Productivity," British Journal of Industrial Relations, London School of Economics, vol. 43(2), pages 233-247, June.
    6. John T. Addison & Claus Schnabel, 2011. "Worker Directors: A German Product that Did Not Export?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 354-374, April.
    7. Gregorič, Aleksandra, 2022. "Board-level worker representation," GLO Discussion Paper Series 1136, Global Labor Organization (GLO).
    8. Boneberg Franziska, 2011. "The Economic Consequences of One-third Co-determination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(3), pages 440-457, June.
    9. Kraft, Kornelius, 2001. "Codetermination as a strategic advantage?," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 543-566, March.
    10. Pejovich Svetozar, 2001. "After Socialism: Where Hope for Individual Liberty Lies," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 11(1), pages 1-24, March.
    11. Lars Hornuf & Abdulkadir Mohamed & Armin Schwienbacher, 2019. "The Economic Impact of Forming a European Company," Journal of Common Market Studies, Wiley Blackwell, vol. 57(4), pages 659-674, July.
    12. Höpner, Martin, 2004. "Unternehmensmitbestimmung unter Beschuss: Die Mitbestimmungsdebatte im Licht der sozialwissenschaftlichen Forschung," MPIfG Discussion Paper 04/8, Max Planck Institute for the Study of Societies.
    13. Stefan Petry, 2018. "Mandatory Worker Representation on the Board and Its Effect on Shareholder Wealth," Financial Management, Financial Management Association International, vol. 47(1), pages 25-54, March.
    14. Vikas Mehrotra & Randall Morck, 2017. "Governance and Stakeholders," NBER Working Papers 23460, National Bureau of Economic Research, Inc.
    15. In‐Mu Haw & Bingbing Hu & Donghui Wu & Xu Zhang, 2018. "Having a Finger in the Pie: Labor Power and Corporate Payout Policy," Financial Management, Financial Management Association International, vol. 47(4), pages 993-1027, December.
    16. Lin, Chen & Schmid, Thomas & Xuan, Yuhai, 2018. "Employee representation and financial leverage," Journal of Financial Economics, Elsevier, vol. 127(2), pages 303-324.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nms:wsimit:10.5771/0342-300x-2021-2-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nomos Verlagsgesellschaft mbH & Co. KG (email available below). General contact details of provider: http://www.nomos.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.