Does the Governed Corporation Perform Better? Governance Structures and Corporate Performance in Germany

Abstract

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Complex Ownership Structures and Corporate Valuations

“…Lehmann and Weigand (2000) show that the existence of a second large owner is positively associated with the profitability of German firms. Faccio, Lang, and Young (2001) find that the existence of multiple large shareholders increases dividend payouts in Europe, but lowers them in Asia.…”

Ownership structure and minority expropriation: the case for multiple blockholders

“…On the issue of contestability, Lehmann and Weigand (2000) show that the presence of a second large shareholder improves the profitability of German listed firms and Maury and Pajuste (2005) find that firm value increases using a sample of Finnish listed firms. Finally, Tribo and Casasola (2010) find that when banks form controlling coalitions between themselves there is a negative effect on firm returns.…”

Recent developments in German corporate governance

“…In a pioneering study on listed companies, Thonet and Poensgen (1979) conclude that management-controlled firms outperform those controlled by outsiders in terms of the return on equity (ROE). Similarly, Edwards and Weichenrieder (1999), using a sample of quoted companies, and Lehmann and Weigand (2000), using a sample of both quoted and unquoted companies, find a significant negative relation between on one side control concentration and on the other side the market-to-book ratio and the return on assets (ROA). However, Kaplan (1994b), Goergen (1998) and find no significant impact of control on corporate performance and on board turnover in listed firms.…”

“…Table 2 provides a summary of recent evidence on control and ownership of German firms. 4 Edwards and Nibler (2000) and report that more than half of the listed German firms in their samples have an owner holding more than 50% of the equity (see also Edwards and Fischer (1994) and Lehmann and Weigand (2000), Goergen, Renneboog and Correia da Silva (2004) and Correia da ). 5 Furthermore, Edwards and Weichenrieder (1999) show that the actual proportion of voting rights exercised by the largest shareholder of listed German firms at the annual general meetings gives them a comfortable majority (54.84%).…”