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The role of hostile stakes in German corporate governance

  • Jenkinson, Tim
  • Ljungqvist, Alexander

This paper uses clinical evidence to show how the German system of corporate control and governance is both more active and more hostile than has previously been suggested. It provides a complete breakdown of ownership and takeover defence patterns in German listed companies and finds highly fragmented (but not dispersed) ownership in non-majority controlled firms. We document how the accumulation of hostile stakes can be used to gain control of target companies given these ownership patterns. The paper also suggests an important role for banks in helping predators accumulate, and avoid the disclosure of, large stakes.

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Article provided by Elsevier in its journal Journal of Corporate Finance.

Volume (Year): 7 (2001)
Issue (Month): 4 (December)
Pages: 397-446

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Handle: RePEc:eee:corfin:v:7:y:2001:i:4:p:397-446
Contact details of provider: Web page: http://www.elsevier.com/locate/jcorpfin

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  18. Franklin Allen & Douglas Gale, 1994. "A Welfare Comparison of the German and U.S. Financial Systems," Center for Financial Institutions Working Papers 94-12, Wharton School Center for Financial Institutions, University of Pennsylvania.
  19. Barclay, Michael J & Holderness, Clifford G, 1992. "The Law and Large-Block Trades," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 265-94, October.
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