This article discusses an empirical puzzle that seems to contradict insights from comparative political economy and the “varieties of capitalism” approach in particular: Why do German Social Democrats opt for more corporate governance liberalization than the Christian Democrats although, in terms of the distributional outcomes of such reforms, one would expect the situation to be reversed? I show that Social Democrats and trade unions adopted their liberal attitude to company regulation after World War II. In the 1970s, competition policy was introduced to make Keynesian macroeconomic policy work; since the 1990s, labor favored shareholder-oriented reforms because they helped employee representatives in “conflicts over managerial control.” I conclude with a discussion of the implications for partisan theory, institutional complementarity, and conflict models in comparative political economy.

/pdf/corporate-governance-reform-and-the-german-party-paradox-15i2ja5ycv.pdf

Corporate Governance Reform and the German Party Paradox

http://www.mpifg.de/people/mh/paper/einleitung.pdf

Einleitung: Alle Macht dem Markt?

Members of management boards as well as supervisory boards often attract public criticism when they are simultaneously active in several other boards. We use a panel data set of the biggest German corporations for the period from 1996-2006 to estimate the impact of multiple board memberships of the CEO and the chairman of the supervisory board on corporate performance. The results suggest a positive and concave relation between the number of external supervisory board seats of the CEO and corporate performance. Chairmen of supervisory boards who simultaneously serve on external management boards tend to improve the performance of the controlled firm. Further external supervisory board seats of the chairman of a supervisory board do not seem to have any influence on corporate performance, though.

/pdf/auswirkungen-von-mehrfachmandaten-deutscher-vorstands-und-r6u3phz031.pdf

Auswirkungen von Mehrfachmandaten deutscher Vorstands- und Aufsichtsratsvorsitzender auf den Unternehmenserfolg

Key indicators show Germany belonging to the countries in the OECD with strong innovation activity even though some weakening in Germany’s position relative to other OECD countries has occurred recently While the redirection of resources towards unification-related spending as well as low economic growth have contributed to this development, more fundamental structural issues have also played a role Germany has benefited less than other high-performing countries from the surge in new technologies, such as ICT and biotechnology, as innovation activities continue to focus on sectors, such as machinery and automobiles, in which Germany has a long record of strong export performance Some features of the regulation of capital, product and labour markets are hampering the supply of risk capital, the creation of new firms and the reallocation of labour In addition, firms are finding it increasingly difficult to recruit highly qualified labour Measures to improve the framework 

Improving the Capacity to Innovate in Germany

Recent deregulation of the banking sector in the US and in Europe allows commercial banks to hold equity in non-financial firms. We develop a model to investigate the effects of bank equity stakes in firms on credit market competition. The main result is that an equity stake confers a competitive advantage to the holding bank, which in equilibrium results in decreased competition in credit markets and higher interest rates being charged to firms. However, regulatory limits on the size of a bank’s stake may, under certain conditions, be counterproductive: they could actually strengthen the equity-owning bank’s competitive advantage. Our findings shed new light on the role of equity in lending relationships, and highlight that, in addition to the well-known prudential aspects, there is an antitrust dimension in the separation of banking and commerce.

On the effects of banks’ equity ownership on credit markets

In Deutschland erfolgt die Finanzierung des Unternehmenssektors traditionell uber die Banken. Im Vergleich zu den USA und Grosbritannien ist die Organisation von Finanzdienstleistungen uber Markte hier deutlich weniger weit entwickelt. Die Ausgestaltung des Finanzsystems hat aber weitreichende Folgen fur den Wettbewerb und das Wachstum. Mit den ordnungspolitischen Masnahmen fur ein funktionsfahiges Finanzsystem hat sich die Monopolkommission in einem Sondergutachten beschaftigt. Welche Empfehlungen gibt sie?

https://www.econstor.eu/bitstream/10419/40132/1/26120808X.pdf

Susanne Pannes-Welter

Papers

Ordnungspolitische Leitlinien für ein funktionsfähiges Finanzsystem