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Dynamics in ownership and firm survival: evidence from corporate Germany

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  • Heiss, Florian
  • Köke, Jens

Abstract

This study investigates the determinants of changes in corporate ownership and firm failure, taking into account different types of sellers and buyers of control blocks. For a large panel of German corporations we find that firms are more likely to fail or to be sold when performance is poor, financial pressure is high, and firm size is small. Cross ownership deters control changes, and ownership concentration has a non-linear impact on the likelihood of control transfer. In contrast to corporate shareholders, private shareholders tend to sell control blocks when financial pressure increases.

Suggested Citation

  • Heiss, Florian & Köke, Jens, 2001. "Dynamics in ownership and firm survival: evidence from corporate Germany," ZEW Discussion Papers 01-63, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:5419
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    References listed on IDEAS

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    Cited by:

    1. Silviano Esteve-Pérez & Amparo Sanchis-Llopis & Juan Sanchis-Llopis, 2010. "A competing risks analysis of firms’ exit," Empirical Economics, Springer, vol. 38(2), pages 281-304, April.
    2. Dimara, Efthalia & Skuras, Dimitris & Tsekouras, Kostas & Tzelepis, Dimitris, 2008. "Productive efficiency and firm exit in the food sector," Food Policy, Elsevier, vol. 33(2), pages 185-196, April.
    3. André Betzer & Erik Theissen, 2009. "Insider Trading and Corporate Governance: The Case of Germany," European Financial Management, European Financial Management Association, vol. 15(2), pages 402-429.
    4. Ettore Croci, 2007. "Corporate Raiders, Performance and Governance in Europe," European Financial Management, European Financial Management Association, vol. 13(5), pages 949-978.
    5. Hielke Buddelmeyer & Paul H. Jensen & Elizabeth Webster, 2006. "Innovation and the Determinants of Firm Survival," Melbourne Institute Working Paper Series wp2006n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    6. Köke, Jens, 2001. "Determinants of acquisition and failure: stylized facts and lessons for empirical studies," ZEW Discussion Papers 01-30, ZEW - Leibniz Centre for European Economic Research.
    7. repec:bla:eufman:v:16:y:2010:i:5:p:805-828 is not listed on IDEAS
    8. Achleitner, Ann-Kristin & Kaserer, Christoph & Kauf, Tobias, 2012. "The dynamics of voting ownership in lone-founder, family-founder, and heir firms," Journal of Family Business Strategy, Elsevier, vol. 3(2), pages 79-96.
    9. Ratbek Dzhumashev & Vinod Mishra & Russell Smyth, 2011. "Exporting, R&D Investment and Firm Survival," Monash Economics Working Papers 39-11, Monash University, Department of Economics.
    10. Tomas Jandik & Craig G. Rennie, 2008. "The Evolution of Corporate Governance and Firm Performance in Transition Economies: The Case of Sellier and Bellot in the Czech Republic," European Financial Management, European Financial Management Association, vol. 14(4), pages 747-791.
    11. Koke, Jens, 2002. "Determinants of acquisition and failure: evidence from corporate Germany," Structural Change and Economic Dynamics, Elsevier, vol. 13(4), pages 457-484, December.
    12. repec:bla:eufman:v:19:y:2013:i:5:p:1017-1050 is not listed on IDEAS
    13. Drakos, Konstantinos & Giannakopoulos, Nicholas, 2011. "On the determinants of credit rationing: Firm-level evidence from transition countries," Journal of International Money and Finance, Elsevier, vol. 30(8), pages 1773-1790.
    14. Stephen G. Sapp, 2008. "The Impact of Corporate Governance on Executive Compensation," European Financial Management, European Financial Management Association, vol. 14(4), pages 710-746.
    15. Roberto Barontini & Lorenzo Caprio, 2006. "The Effect of Family Control on Firm Value and Performance: Evidence from Continental Europe," European Financial Management, European Financial Management Association, vol. 12(5), pages 689-723.
    16. Ioannis Asimakopoulos & Dionysis Lalountas & Costas Siriopoulos, 2008. "The determinants for the survival of firms in the Athens Exchange," Economic Bulletin, Bank of Greece, issue 31, pages 07-30, November.

    More about this item

    Keywords

    Corporate governance; ownership structure; bankruptcy; takeover;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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