TY  - UNPD
A1  - Tröger, Tobias
T1  - Germany's reluctance to regulate related party transactions
T2  - SAFE working paper series ; No. 202
N2  - Germany Inc. was an idiosyncratic form of industrial organization that put financial institutions at the center. This paper argues that the consumption of private benefits in related party transactions by these key agents can be understood as a compensation for their coordinating and monitoring function in Germany Inc. As a consequence, legal tools apt to curb tunneling remained weak in Germany from the perspective of outside shareholders. While banks were in a position to use their firm-level knowledge and influence to limit rent-seeking by other related parties, their own behavior was not subject to meaningful controls. With the dismantling of Germany Inc. banks seized their monitoring function and left an unprecedented void with regard to related party transactions. Hence, a “traditionalist” stance which opposes law reform for related party transactions in Germany negatively affects capital market development, growth opportunities and ultimately social welfare.
T3  - SAFE working paper - 202 
KW  - related party transactions
KW  - Germany Inc.
KW  - industrial organization
KW  - tunneling
KW  - private benefits of control
KW  - capital maintenance
KW  - group law
Y1  - 2018
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/45775
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-457757
UR  - https://ssrn.com/abstract=3129300
PB  - SAFE
CY  - Frankfurt am Main
ER  -