Shareholder value in an adverse environment: the German case

The German political economy has often been cited as a classical case of no n-shareholder value orientation. Its productionist, long-term, consensus or ientation has often been contrasted with the 'Anglo-Saxon approach'. The in fluence of shareholders who press for shareholder value and the importance of the equity market have traditionally been love But there are signs of ch ange. In this article we describe some of these changes and try to assess t he dynamics of this change process. First we show that the limited role of the equity market for company financ ing and for private household savings still provides a very narrow base for a shareholder value economy in Germany. The central pillars of the German system of corporate governance- the dominating role of banks, the system of co-determination and the company-centred management system - are not crumb ling. Change in the direction of shareholder value is therefore limited.