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The Economic Consequences of One-third Co-determination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data

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  • Boneberg Franziska

    (Institute of Economics, Leuphana University of Lueneburg, Scharnhorststr. 1, 21335 Lueneburg, Germany)

Abstract

In Germany, the establishment of supervisory boards and, therefore, the board-level employee representation are mandatory, depending on the legal form and size of a company. However, the empirical analysis reveals that the bigger part of the companies observed (Limited liability companies with 500 to 2000 employees active in the West-German service sector) does not satisfy the law. This fact has strong impact on research questions in the co-determination field: Many studies have tried to analyze the economic consequences of the German co-determination laws (all examining the 1976 Co-determination Act). However, as the regulations are compulsory, compelling results are difficult to obtain. The bigger part of the studies compares companies that fall into the scope of different co-determination laws. This implies that mainly big companies are contrasted to smaller ones. It is not difficult to see that a comparison of such kind entails further irregularities. The study presented allows better analysis. The data is taken from two sources: the commercial Hoppenstedt Database and official German statistics. Due to the special kind of data it is possible to compare companies of same size, same legal form, active in the same sector that only differ in the existence or non-existence of a supervisory board. Therefore, the study at hand provides more accurate evidence of the economic consequences of the German 2004 Co-determination Act.

Suggested Citation

  • Boneberg Franziska, 2011. "The Economic Consequences of One-third Co-determination in German Supervisory Boards: First Evidence for the Service Sector from a New Source of Enterprise Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(3), pages 440-457, June.
    • Handle: RePEc:jns:jbstat:v:231:y:2011:i:3:p:440-457
    DOI: 10.1515/jbnst-2011-0308
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    2. Joachim Wagner, 2015. "Kombinierte Firmenpaneldaten – Datenangebot und Analysepotenziale," Working Paper Series in Economics 340, University of Lüneburg, Institute of Economics.
    3. Ran, Guanggui & Fang, Qiaoling & Luo, Shuai & Chan, Kam C., 2015. "Supervisory board characteristics and accounting information quality: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 18-32.
    4. Joachim Wagner, 2015. "25 Jahre Nutzung vertraulicher Firmenpaneldaten der amtlichen Statistik für wirtschaftswissenschaftliche Forschung: Produkte, Projekte, Probleme, Perspektiven," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 9(2), pages 83-106, November.

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