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Changes in Germany's bank-based financial system: A varieties of capitalism perspective

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  • Vitols, Sigurt

Abstract

Throughout the 20th century Germany's financial system has been dominated by banks. Recently, however, a number of efforts have been made to increase the role of markets within this bank-based financial system, including regulatory innovations, changes in corporate governance, and a reform of the pension system. This paper finds that, despite these changes, there are a surprising number of continuities in the structure of the financial system. The German financial system can therefore still be characterized as bank-based. An explanation for this based on the Varieties of Capitalism viewpoint is advanced, which emphasizes complementarities and continuities in household savings and investment behavior and in patterns of company sector demand for finance.

Suggested Citation

  • Vitols, Sigurt, 2004. "Changes in Germany's bank-based financial system: A varieties of capitalism perspective," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2004-03, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbism:spii200403
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    References listed on IDEAS

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    1. Steven Casper & Mark Lehrer & David Soskice, 1999. "Can High-technology Industries Prosper in Germany? Institutional Frameworks and the Evolution of the German Software and Biotechnology Industries," Industry and Innovation, Taylor & Francis Journals, vol. 6(1), pages 5-24.
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    3. Lütz, Susanne, 1996. "The revival of the nation-state? Stock exchange regulation in an era of internationalized financial markets," MPIfG Discussion Paper 96/9, Max Planck Institute for the Study of Societies.
    4. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752.
    5. Casper, Steven, 1999. "National institutional frameworks and high-technology innovation in Germany: the case of biotechnology," Discussion Papers, Research Unit: Economic Change and Employment FS I 99-306, WZB Berlin Social Science Center.
    6. Edwards,Jeremy & Fischer,Klaus, 1996. "Banks, Finance and Investment in Germany," Cambridge Books, Cambridge University Press, number 9780521566087, November.
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    Cited by:

    1. Jürgens, Ulrich & Sablowski, Thomas, 2008. "Sektorale Innovationsprozesse und die Diskussion über deutsche Innovationsschwächen," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 204.
    2. James Buckley & David Howarth, 2010. "Internal Market: Gesture Politics? Explaining the EU's Response to the Financial Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 48(s1), pages 119-141, September.
    3. Valérie Revest & Sandro Sapio, 2008. "Financing Technology-Based Small Firms in Europe: a review of the empirical evidence," LEM Papers Series 2008/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Labrinidis, George, 2018. "The roots of the Euro," MPRA Paper 86560, University Library of Munich, Germany.

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    More about this item

    Keywords

    Financial systems; venture capital; varieties of capitalism;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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