Report

: The Economic Effects of Board-Level Codetermination in Germany - A Literature Review

This report systematically examines the economic effects of board-level codetermination. It is based on a two-stage search procedure which, after adjustment, resulted in 384 academic publications focused on board-level codetermination.
Of these, 63 quantitative studies were identified that measure the effects of board-level codetermination. The research is international in nature: 40% (25) of the studies were produced by authors at foreign institutions (primarily in the USA); 68% (43) of them were written in English. More than 80% of the academic studies were produced by economists; interdisciplinary work is rare.
Quantitative research focuses on parity-based codetermination: 86% (54) of the studies examine parity-based codetermination, 75% (47) examine one-third participation and 13% (8) examine codetermination in the coal, iron and steel industry.
Overall, 33% (21) of the studies conclude that the effects of board-level codetermination are positive; another 33% (21) conclude that they are neither positive nor negative (neutral); 14% (9) see effects that are both positive and negative; and 19% (12) conclude that the effects are negative. Therefore, just under one fifth of the studies conclude that board-level codetermination has a negative impact, especially in terms of capital market valuation. Regarding innovation, investment and economic performance indicators such as productivity, return and profitability, the research concludes that the effects of codetermination are predominantly positive or at least neutral.

Keywords: board-level codetermination, research, literature, economic effects, I.M.U., Robert Scholz, Navid Armeli