Chapter

Corporate Governance: The Decline of Germany Inc.

Wolfgang Streeck

in Re-Forming Capitalism

Published in print March 2010 | ISBN: 9780199573981
Published online October 2011 | e-ISBN: 9780191702136 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199573981.003.0007
Corporate Governance: The Decline of Germany Inc.

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Germany Inc., which was composed of financial institutions like Deutsche Bank and Allianz, and which can be informally associated with the government and the state, presented firms with protection against various political and economic risks such as minority shareholder pressure, potential takeovers, and socialist and trade union demands for economic planning or nationalization. This network of German firms provided the government with the ability to deal not just with German business as a whole but to separate it from collective commitments that concerned issues in the public interest. As large German banks gradually abandoned the notion of making cheap credit available and discontinuing to serve as semi-public financial infrastructure, the decline of German Inc. began. This chapter attempts to illustrate first the role of Germany Inc. in Germany's economy and how this company slowly disintegrated because of the transformation of the roles of banks.

Keywords: Germany Inc; political risks; economic risks; financial infrastructure; roles of banks; credit; collective commitments

Chapter.  5051 words.  Illustrated.

Subjects: Political Economy

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