Co-operative Capitalism: Corporate Networks in Germany and Britain

Abstract

This study examines the capital network (ownership) and the network of interlocking directorates among the 623 largest business firms in Germany and the 520 largest in Britain. Three major differences are identified in the structure of these networks in the two countries: (1) In Germany ownership is highly concentrated, i.e., shareholdings - generally by the non-financial sector - tend to be sufficiently large to allow the owners to dominate the firm. In Britain ownership is much less concentrated, with almost half of all shareholdings - generally in the financial sector - amounting to less than 5 per cent of company stock. (2) In Germany - in contrast to Britain - the network of interlocking directorates is closely related to the capital network, i.e., it serves to enhance the power of the owners. (3) In Germany - in contrast to Britain - both networks are concentrated within the same industry, i.e., potential competitors are associated with one another. Germany thus illustrates 'co-operative capitalism' whereas Britain exemplifies 'competitive capitalism'.