Ownership Structure and Performance of the Largest German Companies

Download or read book Ownership Structure and Performance of the Largest German Companies written by Leif Anders Fronningen and published by . This book was released on 2009 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: The German system of corporate governance is traditionally known for its concentrated ownership and extensive cross holdings, but it is rapidly evolving towards the Anglo-American model of widely spread ownership. We analyze the relation between the ownership structure and the performance of the 70 largest companies on the German stock exchange. We use a limited sample but a long period of 16 years and ownership data collected in an elaborate procedure. Our results show strong support for the argument that ownership structures are chosen in response to the characteristics of the firm and its environment. We find only partial support for a systematic relation between ownership structure and performance and to the extent that support is found, it rejects Berle and Means' thesis of an inverse relation between firm performance and the diffuseness of ownership. This vindicates, to some extent, the recent evolution from concentrated towards widely held ownership in Germany.