Foundation Owned Firms – A Comparative Study of Stakeholder Approaches

50 Pages Posted: 24 Mar 2017

See all articles by Matthias Draheim

Matthias Draheim

University of Konstanz - Department of Economics

Guenter Franke

University of Konstanz - Department of Economics

Date Written: March 24, 2017

Abstract

How do policy and performance of firms change with variations in the stakeholder approach? We compare foundation owned firms (FoFs) and family firms, with and without codetermination. As foundations have no owners, the impact on corporate governance of residual claimants might be weaker and the impact of other stakeholders stronger. We find that German foundation owned firms are more labor intensive relative to matching firms. But their wages and their hiring and firing policy are about the same. Their financing policy is more conservative. Their financial performance is slightly weaker. Apart from financing policy, codetermination has similar effects. These findings indicate a stronger impact on corporate governance of employees in FoFs, combined with long-term orientation.

Keywords: Stakeholder Approach, Foundation Owned Firms, Codetermination, Privileged employee orientation, Profitability

JEL Classification: D22, D24, G32, G35, L21

Suggested Citation

Draheim, Matthias and Franke, Guenter, Foundation Owned Firms – A Comparative Study of Stakeholder Approaches (March 24, 2017). Available at SSRN: https://ssrn.com/abstract=2940160 or http://dx.doi.org/10.2139/ssrn.2940160

Matthias Draheim

University of Konstanz - Department of Economics ( email )

Konstanz, D-78457
Germany

Guenter Franke (Contact Author)

University of Konstanz - Department of Economics ( email )

Fach 147
Konstanz, 78457
Germany
+49 7531 88 2545 (Phone)
+49 7531 88 3559 (Fax)

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