An ownership structure dominated by blockholdings is central for ‘Rhenish’ capitalism, because it provides ‘patient capital’. Analysis of the 160 largest listed German corporations shows that blockholdings have declined and foreign investors have increased. This could enable activist hedge funds – ‘impatient capital’ demanding high returns – to have greater impact on German listed companies. In order to explore this phenomenon, three case studies have been conducted. These case studies indicate that blockholders are potentially able to shield companies against hedge funds, and that impatient capital is able to gain influence over corporations that are not protected by patient blockholders – however, the behaviour of blockholders and hedge funds is more complex than commonly theorized. On balance, these developments contribute to an increased internal diversity of Rhenish capitalism.
AlbertM (1993) Capitalism Against Capitalism, London: Whurr.
2.
AmableB (2003) The Diversity of Modern Capitalism, Oxford: Oxford University Press.
3.
BechtMBoehmerE (2003) Voting control in German corporations. International Review of Law and Economics23(1): 1–29.
4.
BechtMFranksJRGrantJ (2010) Hedge Fund Activism in Europe. Finance Working Article No. 283/2010. Brussels: ECGI.
5.
BesslerWDrobetzWHollerJ (2008) Capital Markets and Corporate Control: Empirical Evidence from Hedge Fund Activism in Germany, Giessen: Justus-Liebig University.
BriggsTW (2006) Corporate governance and the new hedge fund activism: An empirical analysis. Journal of Corporation Law32(4): 681–738.
11.
BruffIHornL (2012) Varieties of capitalism in crisis?Competition and Change16(3): 161–168.
12.
BuchananJChaiDHDeakinS (2012) Hedge Fund Activism in Japan, Cambridge: Cambridge University Press.
13.
Business Wire (2001) Rochling Industrieverwaltung GmbH Purchased Shares of Rheinmetall AG Held by Wyser-Pratte and Co., Inc. Available at: http://www.thefreelibrary.com/Joint+press+release per cent2FRochling+Industrieverwaltung+GmbH+Purchased…-a080340389 (accessed 14 April 2015).
CulpepperPD (2005) Institutional change in contemporary capitalism. World Politics57(2): 173–199.
17.
CulpepperPD (2011) Quiet Politics and Business Power: Corporate Control in Europe and Japan, Cambridge: Cambridge University Press.
18.
DeegR (2009) The rise of internal capitalist diversity? Changing patterns of finance and corporate governance in Europe. Economy and Society38(4): 552–579.
19.
DeegR (2010) Industry and finance in Germany since unification. German Politics and Society28(2): 116–129.
20.
DrerupT (2011) Much Ado About Nothing. The Effects of Hedge Fund Activism in Germany, Bonn: University of Bonn.
21.
DW (2002) Rheinmetall starts reaping rewards of restructuring. Available at: http://www.dw.de/dw/article/0,,512259,00.html (accessed 14 April 2015).
EpsteinGA (2005) Financialization and the World Economy, Cheltenham: Edward Elgar.
25.
FichtnerJ (2013) Hedge funds: Agents of change for financialization. Critical Perspectives on International Business9(4): 358–376.
26.
FichtnerJ (2014) Privateers of the Caribbean: The Hedge Funds-US-UK-Offshore Nexus. Competition and Change18(1): 37–53.
27.
FranksJMayerC (2001) Ownership and control of German Corporations. Review of Financial Studies14(4): 943–977.
28.
GeorgeABennettA (2005) Case Studies and Theory Development in the Social Sciences, Cambridge, MA: MIT Press.
29.
GoyerM (2006) Varieties of institutional investors and national models of capitalism: The transformation of corporate governance in France and Germany. Politics and Society34(3): 399–430.
30.
GoyerM (2011) Contingent Capital: Short-Term Investors and the Evolution of Corporate Governance in France and Germany, Oxford: Oxford University Press.
31.
HackethalASchmidtRHTyrellM (2005) Banks and German corporate governance: On the way to a capital market-based system?Corporate Governance: An International Review13(3): 397–407.
LaneCWoodG (2009) Capitalist diversity and diversity within capitalism. Economy and Society38(4): 531–551.
42.
LeaverAMontalbanM (2013) Aventis and the complexity of capitalist organization. Competition and Change14(1): 1–22.
43.
MansiSAReebDM (2002) Corporate diversification: What gets discounted?Journal of Finance57(5): 2167–2183.
44.
NölkeAPerryJ (2007) The power of transnational private governance: Financialization and the IASB. Business and Politics9(3): 1–25.
45.
NowakE (2004) Investor protection and capital market regulation in Germany. In: KrahnenJPSchmidtRH (eds) The German Financial System, Oxford: Oxford University Press, pp. 425–449.
46.
O’SullivanM (2005) Typologies, ideologies and realities of capitalism. Socio-economic Review3(3): 547–558.
SchmidtRHSpindlerG (2008) Finanzinvestoren aus ökonomischer und juristischer Perspektive, Baden-Baden: Nomos.
49.
SeawrightJGerringJ (2008) Case selection techniques in case study research: A menu of qualitative and quantitative options. Political Research Quarterly61(2): 294–308.
StreeckW (2010) Re-forming Capitalism: Institutional Change in the German Political Economy, Oxford: Oxford University Press.
52.
StreeckWThelenK (2005) Introduction: Institutional change in advanced political economies. In: StreeckWThelenK (eds) Beyond Continuity: Institutional Change in Advanced Political Economies, Oxford: Oxford University Press.
53.
VitolsS (2004) Negotiated shareholder value: The German variant of an Anglo-American practice. Competition and Change8(4): 357–374.
