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Universal banking, control rights, and corporate finance in Germany

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  • William R. Emmons
  • Frank A. Schmid

Abstract

This article describes the most important corporate governance practices in contemporary Germany. These practices include a prominent role for universal banks, other large financial and non-financial firms, and employees through a system known as codetermination. While some similarities exist, many features of corporate governance in Germany differ greatly from those found in the United States. This article provides historical background and a review of the existing empirical evidence on these topics.

Suggested Citation

  • William R. Emmons & Frank A. Schmid, 1998. "Universal banking, control rights, and corporate finance in Germany," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 19-42.
  • Handle: RePEc:fip:fedlrv:y:1998:i:jul:p:19-42:n:v.80no.4
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    References listed on IDEAS

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    Cited by:

    1. Edwards, Jeremy S.S. & Weichenrieder, Alfons J., 2009. "Control rights, pyramids, and the measurement of ownership concentration," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 489-508, October.
    2. Robert S. Chirinko & Hans van Ees & Harry Garretsen & Elmer Sterken, 1999. "Firm Performance, Financial Institutions and Corporate Governance in the Netherlands," CESifo Working Paper Series 210, CESifo Group Munich.
    3. Andreani, Ettore, 2003. "Corporate Control and the Financial System in Germany: Recent Changes in the Role of Banks," Thuenen-Series of Applied Economic Theory 37, University of Rostock, Institute of Economics.
    4. Frank A. Schmid & Mark Wahrenburg, 2002. "Mergers and acquisitions in Germany," Working Papers 2002-027, Federal Reserve Bank of St. Louis.
    5. 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.
    6. Gorton, Gary & Schmid, Frank A., 2000. "Universal banking and the performance of German firms," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 29-80.
    7. Becht, Marco & Boehmer, Ekkehart, 2003. "Voting control in German corporations," International Review of Law and Economics, Elsevier, vol. 23(1), pages 1-29, March.
    8. Hans Degryse & Steven Ongena, 2001. "Bank Relationships and Firm Profitability," Financial Management, Financial Management Association, vol. 30(1), Spring.
    9. Schmidt, Reinhard H., 2003. "Corporate Governance in Germany: An Economic Perspective," CFS Working Paper Series 2003/36, Center for Financial Studies (CFS).
    10. Din, Shahab-u- & Javid, Attiya Yasmin, 2011. "Impact of managerial ownership on financial policies and the firm’s performance: evidence Pakistani manufacturing firms," MPRA Paper 37560, University Library of Munich, Germany.
    11. Istemi Demirag & Mehmet Serter, 2003. "Ownership Patterns and Control in Turkish Listed Companies," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(1), pages 40-51, January.
    12. Franks, Julian & Mayer, Colin, 2001. "Ownership and Control of German Corporations," Review of Financial Studies, Society for Financial Studies, vol. 14(4), pages 943-977.
    13. Hafiz Mustansar Javaid & Snober Javid, 2017. "Determining Agency Theory Framework through Financial Leverage & Insider Ownership," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(3), pages 21-28, March.
    14. Elston, Julie Ann & Goldberg, Lawrence G., 2003. "Executive compensation and agency costs in Germany," Journal of Banking & Finance, Elsevier, vol. 27(7), pages 1391-1410, July.

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    Keywords

    Corporations - Finance ; Germany;

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