August 2009

IZA DP No. 4352: One-third Codetermination at Company Supervisory Boards and Firm Performance in German Manufacturing Industries: First Direct Evidence from a New Type of Enterprise Data

published in: Schmollers Jahrbuch: Zeitschrift für Wirtschafts- und Sozialwissenschaften /Journal of Applied Social Science Studies, 2011, 131 (1), 91-106

This paper contributes to the empirical literature on the co-determination – firm performance nexus by using a new type of data that combines information on the co-determination status of enterprises from a commercial data base and supplementary information collected from the firms with comprehensive data on the firms from official statistics. The data allow for the first time a direct comparison of enterprises from the same size class with and without codetermination at the supervisory board level. It is shown that one-third codetermination at the supervisory board level in limited-liability companies from West German manufacturing industries seems to be neither positively nor negatively related to two core firm performance indicators, productivity and profitability.