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Changes in corporate governance of German corporations: convergence to the Anglo-American model?

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  • Christel Lane

Abstract

This paper examines the many changes which have transformed the German system of corporate governance during the last seven odd years. It concludes that it is in the process of converging towards the Anglo-American system and that this has fundamentally affected the way strategic decisions are made in firms. Large, internationally oriented companies are particularly affected. But the notion of shareholder value and its many behavioural effects are gradually spreading also to other parts of the economy. Consequently, the distinctive logic, which had underpinned the German variety of capitalism during most of the post-war period, is eroding. This transformation is affecting also labour and industrial relations in negative ways. The argument is empirically substantiated with data about recent trends in capital markets, banks and firms. The paper theoretically examines institutional change, focussing on the notions of system logic and institutional complementarity. It examines both external sources of change and internal powerful actors who promote the process of transformation. The notion of hybridisation of the German business system is examined but is rejected in favour of a trend towards convergence. Convergence is not seen as a functional necessity, nor is it viewed as inevitable.

Suggested Citation

  • Christel Lane, 2003. "Changes in corporate governance of German corporations: convergence to the Anglo-American model?," Working Papers wp259, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp259
    Note: PRO-2
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    File URL: https://www.jbs.cam.ac.uk/cbrwp259/
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    References listed on IDEAS

    as
    1. Christel Lane, 1995. "Industry and Society in Europe," Books, Edward Elgar Publishing, number 272.
    2. C Lane & S Quack, 2001. "How Banks Construct and Manage Risk: A Sociological Study of Small Firm Lending in Britain and Germany," Working Papers wp217, Centre for Business Research, University of Cambridge.
    3. Deeg, Richard, 2001. "Institutional change and the uses and limits of path dependency: The case of German finance," MPIfG Discussion Paper 01/6, Max Planck Institute for the Study of Societies.
    4. Simon Deakin & Richard Hobbs & David Nash & Giles Slinger, 2002. "Implicit contracts, takeovers and corporate governance: in the shadow of the city code," Working Papers wp254, Centre for Business Research, University of Cambridge.
    5. S. Deakin & R. Hobbs & S. Konzelmann & F. Wilkinson, 2001. "Partnership, Ownership and Control: The Impact of Corporate Governance on Employment Relations," Working Papers wp200, Centre for Business Research, University of Cambridge.
    6. Streeck, Wolfgang, 2001. "The transformation of corporate organization in Europe: An overview," MPIfG Working Paper 01/8, Max Planck Institute for the Study of Societies.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate governance; capital markets; German variety of capitalism; institutional change.;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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