Comparing Germany and Anglo-America

Abstract

This chapter compares publicly listed firms in Germany with matched firms in the United States and the United Kingdom to assess whether corporate short-termism varies systematically across institutional contexts and whether Germany is converging towards the Anglo-American model. Using matched samples by industry and firm size, it analyses shareholder payout and real investment over the period from the mid-2000s to the late 2010s. The chapter shows that German public firms consistently exhibit lower levels of shareholder payout than their US and UK counterparts and that there is no clear evidence of convergence over time. Differences in real investment are more muted, but important contrasts emerge in the composition of investment and the use of acquisitions. The chapter argues that lower short-termism in Germany is linked to institutional features that stabilise ownership and constrain takeover pressures, including blockholding structures and labour influence. It also highlights differences in managerial incentives and tenure and shows how these are underpinned by divergent views of the status and rights of dispersed shareholders. The findings demonstrate that exposure to the stock market does not generate uniform outcomes and that institutional and ideational contexts remain central to explaining corporate behaviour.