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.
5 Appendix
Tab. A1
Firm characteristics by sector 1913.
| Sector | Firm age in years | Joint stock capital in million M/RM | Distance to Berlin in km | Number of firms |
|---|---|---|---|---|
| Banking | 38.1 | 42.1 | 259 | 63 |
| Insurance | 53.2 | 6.5 | 201 | 48 |
| Mining | 33.0 | 17.7 | 324 | 100 |
| Heavy industry | 21.8 | 5.1 | 249 | 168 |
| Light industry | 24.7 | 3.6 | 268 | 118 |
| Food processing | 25.2 | 2.9 | 255 | 86 |
| Transportation | 25.8 | 13.1 | 222 | 68 |
| Chemical industry | 26.4 | 9.2 | 252 | 35 |
| Public utility | 22.3 | 30.7 | 196 | 32 |
| Others | 23.7 | 7.0 | 186 | 125 |
| All firms | 27.7 | 11.1 | 246 | 843 |
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.
| Sector | Firm age in years | Joint stock capital in million M/RM | Distance to Berlin in km | Number of firms |
|---|---|---|---|---|
| Banking | 47.0 | 16.3 | 186 | 51 |
| Insurance | 64.9 | 4.8 | 221 | 43 |
| Mining | 39.7 | 26.8 | 287 | 86 |
| Heavy industry | 28.2 | 5.4 | 254 | 245 |
| Light industry | 30.4 | 4.9 | 278 | 200 |
| Food processing | 37.1 | 4.0 | 305 | 77 |
| Transportation | 37.9 | 13.1 | 217 | 67 |
| Chemical industry | 32.0 | 17.5 | 244 | 53 |
| Public utility | 27.6 | 20.8 | 214 | 63 |
| Others | 29.6 | 3.8 | 195 | 179 |
| All firms | 33.6 | 9 | 245 | 1,064 |
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) | |
|---|---|---|---|---|---|---|---|---|---|---|
| VARIABLES | end-of-year price | end-of-year price | end-of-year price | end-of-year price | end-of-year price | Return on Capital | Return on Capital | Return on Capital | Return on Capital | Return 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 | -0.101 | 0.193 | ||||||||
| (0.0774) | (0.127) | |||||||||
| Any government connection | -0.0505 | 0.00391 | ||||||||
| (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 connection | 0.235 | 0.526[***] | ||||||||
| (0.153) | (0.151) | |||||||||
| Tenure | -0.0450 | -0.0573 | ||||||||
| (0.111) | (0.287) | |||||||||
| No of board seats | -0.107 | 0.0646 | ||||||||
| (0.0684) | (0.124) | |||||||||
| Board size | -0.000670 | 0.000285 | -0.00248 | 0.000792 | 0.00104 | 0.0288 | 0.0338 | 0.0269 | 0.0316 | 0.0269 |
| (0.0587) | (0.0573) | (0.0569) | (0.0556) | (0.0590) | (0.121) | (0.119) | (0.120) | (0.120) | (0.118) | |
| Joint stock capital | 0.183[***] | 0.183[***] | 0.182[***] | 0.181[***] | 0.185[***] | 0.0609 | 0.0592 | 0.0598 | 0.0589 | 0.0589 |
| (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 | -0.0204 | 0.0221 | -0.0246 | 0.00887 | 0.00579 | 0.0106 | 0.00779 | 0.0107 |
| (0.0369) | (0.0359) | (0.0365) | (0.0360) | (0.0362) | (0.131) | (0.129) | (0.127) | (0.125) | (0.129) | |
| Distance to Berlin | 0.0221 | 0.0222 | 0.0221 | 0.0228 | 0.0220 | 0.0304 | 0.0319 | 0.0304 | 0.0315 | 0.0304 |
| (0.0127) | (0.0127) | (0.0127) | (0.0126) | (0.0127) | (0.0308) | (0.0304) | (0.0309) | (0.0307) | (0.0310) | |
| Sector dummies | yes | yes | yes | yes | yes | yes | yes | yes | yes | yes |
| Observations | 824 | 824 | 824 | 824 | 824 | 746 | 746 | 746 | 746 | 746 |
| R-squared | 0.135 | 0.135 | 0.134 | 0.137 | 0.136 | 0.047 | 0.049 | 0.047 | 0.050 | 0.047 |
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) | |
|---|---|---|---|---|---|---|---|---|---|---|
| VARIABLES | end-of-year price | end-of-year price | end-of-year price | end-of-year price | end-of-year price | Return on Capital | Return on Capital | Return on Capital | Return on Capital | Return on Capital |
| Any political connection | 0.117 | -0.0646 | ||||||||
| (0.0992) | (0.198) | |||||||||
| Current political connection | 0.142 | -0.350[*] | ||||||||
| (0.407) | (0.283) | |||||||||
| Former political connection | 0.0159 | 0.0108 | ||||||||
| (0.174) | (0.230) | |||||||||
| Continuous political connection | 0.264 | -0.0143 | ||||||||
| (0.264) | (0.237) | |||||||||
| Any government connection | 0.233[*] | -0.121 | ||||||||
| (0.104) | (0.218) | |||||||||
| Only current government connectior | 1 | 0.151 | -0.559[*] | |||||||
| (0.437) | (0.282) | |||||||||
| Former government connection | 0.136 | -0.0444 | ||||||||
| (0.139) | (0.234) | |||||||||
| Continuous government connection | 0.407 | -0.0610 | ||||||||
| (0.288) | (0.362) | |||||||||
| Tenure | -0.00985 | 0.277 | ||||||||
| (0.204) | (0.386) | |||||||||
| No of board seats | 0.545[*] | -0.529 | ||||||||
| (0.272) | (0.477) | |||||||||
| Board size | -0.243[*] | -0.244[*] | -0.252[*] | -0.253[*] | -0.259[*] | -0.00426 | -0.000315 | -0.00229 | 0.00274 | -0.0190 |
| (0.124) | (0.125) | (0.126) | (0.125) | (0.130) | (0.189) | (0.189) | (0.189) | (0.190) | (0.190) | |
| Joint stock capital | 0.401[***] | 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 age | 0.365[**] | 0.364[**] | 0.363[**] | 0.365[**] | 0.366[**] | 0.0835 | 0.0866 | 0.0834 | 0.0855 | 0.0831 |
| (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 dummies | yes | yes | yes | yes | yes | yes | yes | yes | yes | yes |
| Observations | 884 | 884 | 884 | 884 | 884 | 624 | 624 | 624 | 624 | 624 |
| R-squared | 0.255 | 0.256 | 0.257 | 0.257 | 0.259 | 0.081 | 0.083 | 0.082 | 0.084 | 0.084 |
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
© 2018 Walter de Gruyter GmbH, Berlin/Boston