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Dynamics in the german system of corporate governance? Empirical findings regarding interlocking directorates

: Heinze, T.


Economy and society 33 (2004), Nr.2, S.218-238
ISSN: 0308-5147
Fraunhofer ISI ()
corporate governance; network; interlocking directorate; market for corporate control; Germany

Recent discussion on German corporate governance is empirically inconclusive as to whether institutional change has been strong enough to speak of convergence tendencies towards the Anglo-Saxon outsider system. This article adds to this debate in two ways. First, structural changes in the network of interlocking directorates of large German corporations are examined from a longitudinal perspective. There is considerable continuity of structural network features on the meso- and macro-level between 1989 and 2001. Quantitative dilution of the network has not been translated into a process of structural erosion. Second, the German market for corporate control is found underdeveloped over time, because three-quarters of public take-over bids are tendered to consolidate already existing controlling stockholdings, and no critical mass of companies exists for trade in this market. It is concluded that current institutional change should not be interpreted as system change or convergence towards the Anglo-Saxon model of corporate governance.