The German Corporate Governance Code: Experience From the Years 2002-2009

HHL Research Paper Series in Corporate Governance No. 1

Zeitschrift für Corporate Governance, 20011 (different title)

11 Pages Posted: 13 Dec 2010 Last revised: 17 Jul 2011

See all articles by Daniel F. Jahn

Daniel F. Jahn

Technische Universität München

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Christian Strenger

DWS Investments; Handelshochschule Leipzig (HHL)

Michael Wolff

University of Göttingen

Date Written: August 6, 2010

Abstract

Due to the numerous corporate scandals during the late 90s, in September 2001 the German Ministry of Justice appointed the "Government Commission German Corporate Governance Code" to develop a code of best practice. The first version of the German Corporate Governance Code was passed at February 26, 2002. Since then the code adopts a comply-or-explain principle. In a broad study we evaluate which companies comply with the German Corporate Governance Code and whether high levels of compliance are rewarded by the capital market. In the empirical analysis, we find that that (i) firms with high level of free float conform the most to the code and (ii) that the capital market rewards only these firms, i.e. firms with high levels of free float, for high levels of compliance.

Note: Downloadable document is in German.

Keywords: corporate governance, soft regulation, Germany, German corporate governance code

JEL Classification: G34, G30, G38

Suggested Citation

Jahn, Daniel F. and Rapp, Marc Steffen and Strenger, Christian and Wolff, Michael, The German Corporate Governance Code: Experience From the Years 2002-2009 (August 6, 2010). HHL Research Paper Series in Corporate Governance No. 1. Available at SSRN: https://ssrn.com/abstract=1723152 or http://dx.doi.org/10.2139/ssrn.1723152

Daniel F. Jahn

Technische Universität München ( email )

Arcisstrasse 21
Munich, DE 80333
Germany
+49(0)17623918324 (Phone)

Marc Steffen Rapp (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

Christian Strenger

DWS Investments ( email )

Frankfurt
Germany

Handelshochschule Leipzig (HHL) ( email )

Jahnallee 59
Leipzig, 04109
Germany

Michael Wolff

University of Göttingen ( email )

Platz der Göttinger Sieben 3
Göttingen, DE 37073
Germany

HOME PAGE: http://www.contolling.uni-goettingen.de

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