Change within Traditional Channels: German SMEs, the Restructuring of the Banking Sector, and the Growing Shareholder-Value Orientation

Small- and medium-sized enterprises (SMEs), especially in the manufacturing sector, have been an essential part of the German coordinated market economy in the second half of the 20th century. Hence, to understand the departure of the German economy from this model since the mid-1990s, it is valuable to scrutinize changes within SMEs. To the ‘varieties of capitalism’ approach (VoC), the positive mutual reinforcement between the institutional systems and firm strategies has been decisive for the explanation of institutional stability and path dependency (cf. Hall and Soskice 2001). In many dimensions, manufacturing SMEs have a stake in the process: they are a major player in the reproduction of the occupational system; have accepted co-determination in labour relations — at least when they are medium-sized; prefer highquality niche strategies accommodated to the institutional opportunities and constraints; and have moved into a symbiotic relationship with the bank-based financing system.