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Dynamics in ownership and firm survival: evidence from corporate Germany

  • Heiss, Florian
  • Köke, Jens

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.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 01-63.

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Date of creation: 2001
Date of revision:
Handle: RePEc:zbw:zewdip:5419
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  1. Åstebro, Thomas & Winter, Joachim, 2012. "More than a dummy: The probability of failure, survival and acquisition of firms in financial distress," Munich Reprints in Economics 20185, University of Munich, Department of Economics.
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  7. Lucian Arye Bebchuk, 1994. "Efficient and Inefficient Sales of Corporate Control," NBER Working Papers 4788, National Bureau of Economic Research, Inc.
  8. Franks, Julian & Mayer, Colin, 1998. "Bank control, takeovers and corporate governance in Germany," Journal of Banking & Finance, Elsevier, vol. 22(10-11), pages 1385-1403, October.
  9. Vassilis A. Hajivassiliou & Paul A. Ruud, 1993. "Classical Estimation Methods for LDV Models Using Simulation," Cowles Foundation Discussion Papers 1051, Cowles Foundation for Research in Economics, Yale University.
  10. Mitchell, Mark L. & Mulherin, J. Harold, 1996. "The impact of industry shocks on takeover and restructuring activity," Journal of Financial Economics, Elsevier, vol. 41(2), pages 193-229, June.
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  18. repec:tpr:qjecon:v:113:y:1998:i:1:p:187-225 is not listed on IDEAS
  19. Mike Burkart & Denis Gromb & Fausto Panunzi, 2000. "Agency Conflicts in Public and Negotiated Transfers of Corporate Control," Journal of Finance, American Finance Association, vol. 55(2), pages 647-677, 04.
  20. Lamont, Owen, 1997. " Cash Flow and Investment: Evidence from Internal Capital Markets," Journal of Finance, American Finance Association, vol. 52(1), pages 83-109, March.
  21. Denis, David J. & Sarin, Atulya, 1999. "Ownership and board structures in publicly traded corporations," Journal of Financial Economics, Elsevier, vol. 52(2), pages 187-223, May.
  22. Mulherin, J. Harold & Boone, Audra L., 2000. "Comparing acquisitions and divestitures," Journal of Corporate Finance, Elsevier, vol. 6(2), pages 117-139, July.
  23. Jenkinson, Tim & Ljungqvist, Alexander P., 1997. "Hostile Stakes and the Role of Banks in German Corporate Governance," CEPR Discussion Papers 1695, C.E.P.R. Discussion Papers.
  24. Shleifer, Andrei & Vishny, Robert W, 1992. " Liquidation Values and Debt Capacity: A Market Equilibrium Approach," Journal of Finance, American Finance Association, vol. 47(4), pages 1343-66, September.
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  26. Barclay, Michael J & Holderness, Clifford G, 1991. " Negotiated Block Trades and Corporate Control," Journal of Finance, American Finance Association, vol. 46(3), pages 861-78, July.
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