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Ownership and Control of German Corporations

Author

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  • Colin Mayer
  • Julian Franks

Abstract

In a study of the ownership of German corporations, we find a strong relation between board turnover and corporate performance, little association of concentrations of ownership with managerial disciplining and only limited evidence that pyramid structures can be used for control purposes. The static relation of ownership to control in Germany is therefore similar to the UK and US. However, there are marked differences in the dynamic relation transfers of ownership. There is an active market in share blocks giving rise to changes in control but the gains are limited and accrue solely to the holders of large blocks, not to minority investors. We provide evidence of low overall benefits to control changes and the exploitation of private benefits of control.

Suggested Citation

  • Colin Mayer & Julian Franks, 2000. "Ownership and Control of German Corporations," Economics Series Working Papers 2001-FE-11, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:2001-fe-11
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    File URL: https://ora.ox.ac.uk/objects/uuid:ebccd09d-1393-4e0e-9bd5-beab46bbb12e
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    Citations

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    Cited by:

    1. Marco Pagano & Fabio Panetta & Luigi Zingales, "undated". "Why Do Companies Go Public? An Empirical Analysis," CRSP working papers 330, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    2. William R. Emmons & Frank A. Schmid, 2001. "Corporate governance, entrenched labor, and economic growth," Working Papers 2001-023, Federal Reserve Bank of St. Louis.
    3. Mark J. Roe, 2001. "Les conditions politiques au développement de la firme managériale," Revue Finance Contrôle Stratégie, revues.org, vol. 4(1), pages 123-182, March.
    4. 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.
    5. Franks, Julian & Mayer, Colin & Renneboog, Luc, 2001. "Who Disciplines Management in Poorly Performing Companies?," Journal of Financial Intermediation, Elsevier, vol. 10(3-4), pages 209-248, July.
    6. Elsas, Ralf, 2005. "Empirical determinants of relationship lending," Journal of Financial Intermediation, Elsevier, vol. 14(1), pages 32-57, January.
    7. Köke, Jens, 2001. "Corporate governance, market discipline, and productivity growth," ZEW Discussion Papers 01-55, ZEW - Leibniz Centre for European Economic Research.
    8. Anca-Simona HROMEI, 2019. "Corporate Governance Systems And Convergence Tendencies," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 21, pages 167-174, December.
    9. Santella, Paolo & Baffi, Enrico & Drago, Carlo & Lattuca, Dino, 2008. "A Comparative Analysis of the Legal Obstacles to Institutional Investor Activism in Europe and in the US," MPRA Paper 8929, University Library of Munich, Germany.

    More about this item

    Keywords

    Ownership; control; board turnover; pyramiding; bank control; takeovers;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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