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Corporate Governance in Germany: The Influence of Banks and Large Equity-holders

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  • Jeremy Edwards
  • Marcus Nibler

Abstract

Using data on 158 large German firms, the paper analyses the two main distinctive features of the German corporate governance system - ownership concentration and the role of banks. Ownership concentration is shown to have a positive effect on firm profitability (except when the owners are public-sector bodies). However, banks do not appear to play a role in corporate governance which is distinct from their position as one of several different types of large equity-holder. The results call into question the standard view that banks are an important component of the German system of corporate governance.

Suggested Citation

  • Jeremy Edwards & Marcus Nibler, 1999. "Corporate Governance in Germany: The Influence of Banks and Large Equity-holders," CESifo Working Paper Series 180, CESifo.
    • Handle: RePEc:ces:ceswps:_180
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    References listed on IDEAS

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    Cited by:

    1. Goergen, Marc & Manjon, Miguel C. & Renneboog, Luc, 2008. "Recent developments in German corporate governance," International Review of Law and Economics, Elsevier, vol. 28(3), pages 175-193, September.
    2. Franks, Julian & Mayer, Colin, 2001. "Ownership and Control of German Corporations," The Review of Financial Studies, Society for Financial Studies, vol. 14(4), pages 943-977.
    3. Monika Fiedorczuk, 2017. "Banks and corporate sector in Russia – the evolution and current state of relations in a corporate governance context," Bank i Kredyt, Narodowy Bank Polski, vol. 48(5), pages 463-482.

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