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http://ssrn.com/abstract=1314383
 
 

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Do Cross-Shareholdings Reflect Bank Control on German Companies? An Analysis of Interlocking in the Supervisory Boards


Alberto Onetti


University of Insubria

Alessia Pisoni


University of Insubria - Department of Economics

December 10, 2008


Abstract:     
This paper aims to analyse the characteristics of the bank-industry relationship in Germany, showing the ties among financial and industrial companies both in terms of cross-equity-shareholdings and interlocking directorates for the years 2001-2002. Specifically the main purpose of the research is to demonstrate, for the panel of German companies investigated, that bank-firm relationship relies not only on patrimonial linkages but also on personal relationships. Therefore, in order to try to measure the extent of the banks role in Corporate Governance and to evaluate in a deeper sense the effective influence they have on the industry management, we carried out two different analyses. The first, takes into consideration the equity relationships between banks/insurances and the German industrial firms, the second analyses the number of seats held by the same banks in the correspondent supervisory board. In particular, in our opinion, the analysis of the composition of the supervisory boards can help to outline the personal relationships above mentioned. Therefore is understood, that we consider the presence of bank's representatives in others than banks' supervisory boards as signal of banks' opportunity to exert power and influence. Obviously the study is carried out taking into consideration the sweeping changes that, since the late 1990s, have undergone in this model.

The paper is structured in a straightforward way. Chapter 1 reviews all the relevant literature, discusses the traditional features of the German institutional system and evolving trends. Chapter 2 sets the research hypothesis and the methodological choices of analysis. Chapter 3 deals with the evolving trends of the equity relationships between banks/insurances and the industrial firms of the panel. Chapter 4 integrates the analysis of the previous chapter, with a research on the composition of supervisory boards, and uses the collected data to present a descriptive statistics in order to test the research hypothesis. Chapter 5 summarizes and discusses the results of the research.

Number of Pages in PDF File: 28

Keywords: Corporate Governance, interlocking, shareholdings

JEL Classification: G34, M14

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Date posted: December 11, 2008  

Suggested Citation

Onetti, Alberto and Pisoni, Alessia, Do Cross-Shareholdings Reflect Bank Control on German Companies? An Analysis of Interlocking in the Supervisory Boards (December 10, 2008). Available at SSRN: http://ssrn.com/abstract=1314383 or http://dx.doi.org/10.2139/ssrn.1314383

Contact Information

Alberto Onetti
University of Insubria ( email )
Varese, 21100 21100
Italy
Alessia Pisoni (Contact Author)
University of Insubria - Department of Economics ( email )
Via Monte Generoso, 71
Varese, 21100
Italy
+39 0332 395804 (Phone)
+39 0332 395509 (Fax)
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