Profitability

insights

Codetermination did not lower German profits. Overall productivity and profitability declined for German codetermined firms that went from 1/3 to 1/2 parity from 1975 - 1983. Following Germany's 1976 strengthening of codetermination laws to 1/2 board representation for 2,000+ employee firms, capital-labor ratios declined (favoring capital formation), productivity declined, and profitability increased.

sources

Codetermination and Enterprise Performance: Empirical Evidence from West Germany Economic Effects of Codetermination Labor In the Boardroom

authors

Anoop Rai Michael A. Gurdon Kornelius Kraft Felix FitzRoy Jörg Heining Benjamin Schoefer Simon Jäger

reports

Codetermination