Co-Determination in Germany: The Impact of Court Decisions on Stock Price

Posted: 15 Jan 1997

See all articles by Theodor Baums

Theodor Baums

J.W. Goethe University, Frankfurt/Main; European Corporate Governance Institute (ECGI)

Bernd Frick

University of Witten/Herdecke - Institute of Economics and Business Administration

Date Written: November 1996

Abstract

The event study examines the impact of decisions of German courts during the period 1974-1995 on co-determination issues on the stock price developments of the firms concerned. The authors find that the stock market did not react in a significant way. In a second step the authors ask whether the introduction of the Co-determination Act of 1976 and the ruling of the Federal Constitutional Court of March 1, 1979 on the constitutionality of that Act had any influence on stock prices in those sectors that were most heavily affected by these events. Here also the results are negative. The authors discuss possible explanations.

JEL Classification: G34, G38, K22

Suggested Citation

Baums, Theodor and Frick, Bernd, Co-Determination in Germany: The Impact of Court Decisions on Stock Price (November 1996). Available at SSRN: https://ssrn.com/abstract=10275

Theodor Baums (Contact Author)

J.W. Goethe University, Frankfurt/Main ( email )

Senckenberganlage 31
60325 Frankfurt/M.
Germany
+49 (0) 69 798 22218 (Phone)
+49 (0) 69 798 227474 (Fax)

European Corporate Governance Institute (ECGI)

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1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Bernd Frick

University of Witten/Herdecke - Institute of Economics and Business Administration ( email )

D-58448 Witten
Germany

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