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Ownership and Control of German Corporations

Author

Listed:
  • Julian Franks
  • Colin Mayer

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

  • Julian Franks & Colin Mayer, 2001. "Ownership and Control of German Corporations," OFRC Working Papers Series 2001fe11, Oxford Financial Research Centre.
    • Handle: RePEc:sbs:wpsefe:2001fe11
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    File URL: http://www.finance.ox.ac.uk/file_links/finecon_papers/2001fe11.pdf
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    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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