Impending one-third codetermination did not deter German incorporations of firms that would be impacted by the mandate.

"First, a McCrary (2008) test of the density of incorporations around the reform cutoff suggests that firms did not manipulate incorporation dates, e.g., by delaying incorporation around the reform cutoff date or switching corporate forms. Second, we find no evidence for compositional shifts by industry or legal form in our analysis sample. Both pieces of evidence are consistent with survey evidence that incorporations were not deterred by one-third codetermination."