Transparency of Ownership and Control in Germany

92 Pages Posted: 23 Feb 1999

See all articles by Marco Becht

Marco Becht

Solvay Brussels School of Economics and Management (ULB); European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Ekkehart Boehmer

Singapore Management University - Lee Kong Chian School of Business

Date Written: February 5, 1999

Abstract

We first analyze legal provisions relating to corporate transparency in Germany. We show that despite the new securities trading law (WpHG) of 1995, the practical efficacy of disclosure regulation is very low. On the one hand, the formation of business groups involving less regulated legal forms as intermediate layers can substantially reduce transparency. On the other hand, the implementation of the law is not practical and not very effective. We illustrate these arguments using several examples of WpHG filings.

To illustrate the importance of transparency, we show next that German capital markets are dominated by few large firms accounting for most of the market's capitalization and trading volume. Moreover, the concentration of control is very high. First, 85% of all officially listed AGs have a dominant shareholder (controlling more than 25% of the voting rights). Second, few large blockholders control several deciding voting blocks in listed corporations, while the majority controls only one block.

JEL Classification: G34, K22, G21

Suggested Citation

Becht, Marco and Boehmer, Ekkehart, Transparency of Ownership and Control in Germany (February 5, 1999). Available at SSRN: https://ssrn.com/abstract=149774 or http://dx.doi.org/10.2139/ssrn.149774

Marco Becht

Solvay Brussels School of Economics and Management (ULB) ( email )

42 Avenue F. D. Roosevelt
1050
Brussels, 1050
Belgium
+32 2 6504466 (Phone)

HOME PAGE: http://www.solvay.edu/profile/marcobecht

European Corporate Governance Institute (ECGI) ( email )

Palace of the Academies
Rue Ducale 1 Hertogstraat
Brussels, 1000
Belgium

HOME PAGE: http://www.ecgi.global/users/marco-becht

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ekkehart Boehmer (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

Singapore

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