Economics of Labor Co-Determination in View of Corporate Governance

Posted: 30 Sep 1998

See all articles by Elmar Gerum

Elmar Gerum

University of Marburg

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen)

Date Written: February 1998


The article examines the economic effects of co-determination (by supervisory boards) with regard to theoretical and empirical aspects. We show theoretically, that co-determination can be an efficiency-increasing institution in a market-based economy. An empirical check of the economic effects of German co-determination fails because of the non-existence of large companies without co-determination. Co-determination can also be found in corporate governance systems in other European countries. In the EC a harmonization of co-determination on corporate level is not yet achieved. The reason is the specific historical development of industrial relations in Europe. Instead of an integration through harmonization the European Commission favors system competition with good reasons.

Note: Presented at the Max Planck Institute Conference on Comparative Corporate Governance, May 1997.

Suggested Citation

Gerum, Elmar and Wagner, Helmut, Economics of Labor Co-Determination in View of Corporate Governance (February 1998). Available at SSRN:

Elmar Gerum (Contact Author)

University of Marburg

Universitätsstrasse 24
24 35032 Marburg, D-35032
011-49-6421-28-6590 (Phone)
011-49-6421-28-6595 (Fax)

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen) ( email )

Universitätsstrasse 41
Feithstrathe 140
D-58084 Hagen
011-49-2331-987-2640 (Phone)
011-49-2331-987-391 (Fax)

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