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Performance and Policy of Foundation‐owned Firms in Germany


  • Markus Herrmann
  • Günter Franke


This paper compares performance and policy of foundation‐owned firms and of listed corporations in Germany. Foundations have no owners so that there exist no individuals with financial ownership claims on firms which are wholly owned by foundations. This suggests weaker outside control of foundation‐owned firms implying lower profitability. The empirical findings show a slightly better performance of foundation‐owned firms compared to corporations. Foundation‐owned firms display higher labour intensity, lower labour productivity, and lower salary levels. This policy promotes job security without endangering the viability of foundation‐owned firms.

Suggested Citation

  • Markus Herrmann & Günter Franke, 2002. "Performance and Policy of Foundation‐owned Firms in Germany," European Financial Management, European Financial Management Association, vol. 8(3), pages 261-279, September.
  • Handle: RePEc:bla:eufman:v:8:y:2002:i:3:p:261-279
    DOI: 10.1111/1468-036X.00189

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    Cited by:

    1. Valentina Hartarska & Roy Mersland, 2012. "Which Governance Mechanisms Promote Efficiency in Reaching Poor Clients? Evidence from Rated Microfinance Institutions," European Financial Management, European Financial Management Association, vol. 18(2), pages 218-239, March.
    2. Yoser Gadhoum & Larry H. P. Lang & Leslie Young, 2005. "Who Controls US?," European Financial Management, European Financial Management Association, vol. 11(3), pages 339-363, June.
    3. Franke, Günter & Draheim, Matthias, 2015. "Foundation Owned Firms in Germany - a Field Experiment for Agency Theory," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113217, Verein für Socialpolitik / German Economic Association.
    4. Steen Thomsen & Caspar Rose, 2004. "Foundation Ownership and Financial Performance: Do Companies Need Owners?," European Journal of Law and Economics, Springer, vol. 18(3), pages 343-364, December.
    5. Thomsen, Steen & Rose, Caspar, 2002. "Foundation ownership and financial performance. Do companies need owners?," Working Papers 2002-3, Copenhagen Business School, Department of Finance.
    6. Dijk, Oege & Holmén, Martin, 2017. "Charity, incentives, and performance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 119-128.
    7. Matthias Draheim & Günter Franke, 2018. "Employee Orientation and Financial Performance of Foundation Owned Firms," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 70(4), pages 375-410, November.
    8. Eulerich, Marc & Welge, Martin K., 2011. "Die Einflussnahme von Stiftungen auf die unternehmerische Tätigkeit deutscher Großunternehmen," Arbeitspapiere 198, Hans-Böckler-Stiftung, Düsseldorf.
    9. Seppo Kinkki, 2008. "Minority Protection and Dividend Policy in Finland," European Financial Management, European Financial Management Association, vol. 14(3), pages 470-502, June.

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