Corporate governance in Germany: an assessment of the convergence hypothesis

Abstract

This article focuses on the corporate governance mechanisms in Germany. Emphasis is placed on changes occurring in corporate and financial landscape since the beginning of the nineties. Two interrelated issues are analysed: 1) the extension in which increasing integration in financial and product markets has been affecting the governance pattern of German companies; 2) the claim that this pattern is converging towards that prevailing in the United States. It is argued that, despite outstanding transformations in the way German companies are controlled, there remain some stark contrasts with the Anglo-Saxon model. Thus, the evidence so far is not enough to corroborate the hypothesis that convergence is under way.