Change in the German Model of Corporate Governance: Evidence from Blockholdings 1997–2001

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Abstract
In order to research the dynamics of the German model of corporate governance, data pertaining to major holdings of voting rights in listed companies between 1997 and 2001 were examined. The change that took place in this short period of time is striking, with a falling level of ownership concentration, dissolving cross-holdings, and financial sector institutions losing their position as blockholders. The concentration of voting rights is lowest in companies included in the DAX30 stock-market index. Factors affecting the types of holders of voting rights in a company include the company size, age, economic sector, and location. The analysis shows that Germany made a quick step towards some aspects of the Anglo-American system of corporate governance. However, there are also areas of strong persistence of the German model. In addition, I show that the German model is far from uniform, with different types of companies and different regions demonstrating a variety of corporate governance arrangements as well as distinctive development trajectories.