Skip to content
Licensed Unlicensed Requires Authentication Published by Akademie Verlag June 21, 2018

Reichstag Connections in Pre- and Interwar Germany

Alexander Opitz

Abstract

This article documents widespread connections between stock companies and active or retired politicians in Germany during two distinct political regimes: constitutional monarchy and democracy. These differed largely regarding possible channels of influence, along with the power of the parliament. Despite the theoretical differences, the overall share of connected firms is approximately the same, implying that linking up with the Reichstag was already attractive in Imperial times. Moreover, the prevalence of political connections varied largely between sectors and political parties.

JEL Classification: N 23; N 24; P 16; G 10

5 Appendix

Tab. A1

Firm characteristics by sector 1913.

SectorFirm age in yearsJoint stock capital in million M/RMDistance to Berlin in kmNumber of firms
Banking38.142.125963
Insurance53.26.520148
Mining33.017.7324100
Heavy industry21.85.1249168
Light industry24.73.6268118
Food processing25.22.925586
Transportation25.813.122268
Chemical industry26.49.225235
Public utility22.330.719632
Others23.77.0186125
All firms27.711.1246843

  1. Source: Handbuch der Deutschen Aktiengesellschaften; Reichstaghandbücher. Table contains the percentage share of overall connected firms within the respective sector.

Tab. A2

Firm characteristics by sector 1925.

SectorFirm age in yearsJoint stock capital in million M/RMDistance to Berlin in kmNumber of firms
Banking47.016.318651
Insurance64.94.822143
Mining39.726.828786
Heavy industry28.25.4254245
Light industry30.44.9278200
Food processing37.14.030577
Transportation37.913.121767
Chemical industry32.017.524453
Public utility27.620.821463
Others29.63.8195179
All firms33.692451,064

  1. Source: Handbuch der Deutschen Aktiengesellschaften; Reichstaghandbücher. Table contains the percentage share of overall connected firms within the respective sector.

Tab. A3

Results of regression 1913.

(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)
VARIABLESend-of-year priceend-of-year priceend-of-year priceend-of-year priceend-of-year priceReturn on CapitalReturn on CapitalReturn on CapitalReturn on CapitalReturn on Capital
Any political connection-0.0695-0.0238
(0.0678)(0.200)
Current political connection-0.112-0.351
(0.190)(0.836)
Former political connection-0.0543-0.0698
(0.0780)(0.211)
Continuous political connection-0.1010.193
(0.0774)(0.127)
Any government connection-0.05050.00391
(0.0782)(0.277)
Only current government connection-0.219[***]0.0733
(0.0455)(0.133)
Former government connection-0.109-0.127
(0.0741)(0.319)
Continuous government connection0.2350.526[***]
(0.153)(0.151)
Tenure-0.0450-0.0573
(0.111)(0.287)
No of board seats-0.1070.0646
(0.0684)(0.124)
Board size-0.0006700.000285-0.002480.0007920.001040.02880.03380.02690.03160.0269
(0.0587)(0.0573)(0.0569)(0.0556)(0.0590)(0.121)(0.119)(0.120)(0.120)(0.118)
Joint stock capital0.183[***]0.183[***]0.182[***]0.181[***]0.185[***]0.06090.05920.05980.05890.0589
(0.0323)(0.0324)(0.0327)(0.0318)(0.0330)(0.0514)(0.0510)(0.0524)(0.0519)(0.0527)
Firm age-0.0229-0.0233-0.02040.0221-0.02460.008870.005790.01060.007790.0107
(0.0369)(0.0359)(0.0365)(0.0360)(0.0362)(0.131)(0.129)(0.127)(0.125)(0.129)
Distance to Berlin0.02210.02220.02210.02280.02200.03040.03190.03040.03150.0304
(0.0127)(0.0127)(0.0127)(0.0126)(0.0127)(0.0308)(0.0304)(0.0309)(0.0307)(0.0310)
Sector dummiesyesyesyesyesyesyesyesyesyesyes
Observations824824824824824746746746746746
R-squared0.1350.1350.1340.1370.1360.0470.0490.0470.0500.047

  1. Table shows OLS regression results of various performance variables. Insurances are excluded due to limited transferability (Gelman/Burhop, Berlin Stock Exchange, p. A). Control variables in logarithmized form. Current, former continuous political connection measures are mutually exclusive. Robust standard errors in parentheses ** p<0.05, * p<0.1.

Tab. A4

Results of regression 1925

(1)(2)(3)(4)(5)(6)(7)(S)(9)(10)
VARIABLESend-of-year priceend-of-year priceend-of-year priceend-of-year priceend-of-year priceReturn on CapitalReturn on CapitalReturn on CapitalReturn on CapitalReturn on Capital
Any political connection0.117-0.0646
(0.0992)(0.198)
Current political connection0.142-0.350[*]
(0.407)(0.283)
Former political connection0.01590.0108
(0.174)(0.230)
Continuous political connection0.264-0.0143
(0.264)(0.237)
Any government connection0.233[*]-0.121
(0.104)(0.218)
Only current government connectior10.151-0.559[*]
(0.437)(0.282)
Former government connection0.136-0.0444
(0.139)(0.234)
Continuous government connection0.407-0.0610
(0.288)(0.362)
Tenure-0.009850.277
(0.204)(0.386)
No of board seats0.545[*]-0.529
(0.272)(0.477)
Board size-0.243[*]-0.244[*]-0.252[*]-0.253[*]-0.259[*]-0.00426-0.000315-0.002290.00274-0.0190
(0.124)(0.125)(0.126)(0.125)(0.130)(0.189)(0.189)(0.189)(0.190)(0.190)
Joint stock capital0.401[***]0.401[***]0.397[***]0.397[***]0.395[***]-0.0405-0.0417-0.0381-O.O401-0.0379
(0.0492)(0.0499)(0,0493)(0.0500)(0.0487)(0.0592)(0.0594)(0.0594)(0.0599)(0.0558)
Firm age0.365[**]0.364[**]0.363[**]0.365[**]0.366[**]0.08350.08660.08340.08550.0831
(0.133)(0.133)(0.133)(0.134)(0.132)(0.119)(0.119)(0.117)(0.116)(0.116)
Distance to Berlin-0.00820-0.00776-0.00692-O.O0649-0.00822-0.0200-0.0195-0.0202-0.0198-0.0176
(0.0247)(0.0242)(0.0241)(0.0238)(0.0235)(0.0323)(0.0317)(0.0321)(0.0315)(0.0323)
Sector dummiesyesyesyesyesyesyesyesyesyesyes
Observations884884884884884624624624624624
R-squared0.2550.2560.2570.2570.2590.0810.0830.0820.0840.084

  1. Table shows OLS regression results of various performance variables. Insurances are excluded due to limited transferability (Gelman/Burhop, Berlin Stock Exchange, p. 4). Control variables In logarithmized form. Current, former continuous political connection measures are mutually exclusive. Robust standard errors in parentheses

Published Online: 2018-06-21
Published in Print: 2018-05-25

© 2018 Walter de Gruyter GmbH, Berlin/Boston

Scroll Up Arrow