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Performance and Policy of Foundation‐owned Firms in Germany
Author(s) -
Herrmann Markus,
Franke Günter
Publication year - 2002
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/1468-036x.00189
Subject(s) - foundation (evidence) , salary , profitability index , productivity , business , empirical research , job security , control (management) , empirical evidence , finance , labour economics , accounting , economics , market economy , management , economic growth , law , political science , engineering , work (physics) , mechanical engineering , philosophy , epistemology
This paper compares performance and policy of foundation‐owned firms and of listed corporations in Germany. Foundations have no owners so that there exist no individuals with financial ownership claims on firms which are wholly owned by foundations. This suggests weaker outside control of foundation‐owned firms implying lower profitability. The empirical findings show a slightly better performance of foundation‐owned firms compared to corporations. Foundation‐owned firms display higher labour intensity, lower labour productivity, and lower salary levels. This policy promotes job security without endangering the viability of foundation‐owned firms.