An empirical analysis of the 2000 corporate tax reform in Germany: Effects on ownership and control in listed companies

This paper is a first attempt to analyse the implications of the 2000 corporate tax reform on ownership concentration in Germany. The empirical results document a fall in ownership concentration and a decrease in the power of top institutional owners including the big banks. Hence, the description of German corporate governance as a bank-based system may no longer apply. However, even though the corporate tax reform had a significant effect on ownership concentration and on the power of the top-institutional blockholders, the change in the corporate income tax law did not revolutionise German corporate governance. Ownership concentration in 2005 is still high compared to the Anglo-American economies and an active market for corporate control is not observed. (c) 2008 Elsevier Inc. All rights reserved.