Ownership and Control of German Corporations

In a study of the ownership of German corporations, we finda strong relation between board turnover and corporate performance,little association of concentrations of ownership with managerialdisciplining, and only limited evidence that pyramid structurescan be used for control purposes. The static relationship ofownership to control in Germany is therefore similar to theUnited Kingdom and the United States. However, there are markeddifferences in dynamic relations involving transfers of ownership.There is an active market in share blocks giving rise to changesin control, but the gains are limited and accrue solely to theholders of large blocks, not to minority investors. We provideevidence of low overall benefits to control changes and theexploitation of private benefits of control.