Journal article
Global finance and the German model: German corporations, market incentives, and the management of employer-sponsored pension institutions
- Abstract:
- Where there was a settled political geography of state power and responsibilities, the remarkable growth of global finance has put enormous pressure on national economic, political and social institutions. Furthermore, the looming crisis facing many continental European social security systems has raised many doubts about the long-term viability of the German model compared to its Anglo-American rivals. In this context, large German corporations have sought ways of sustaining their global competitiveness by, in part, restructuring their national and regional commitments. To illustrate, in this paper we concentrate on the nature and organization of German employer-sponsored pension institutions in relation to Anglo-American management practice. Two issues drive the analysis. One has to do with an emerging coalition between corporate management and shareholders with respect to the market value of the firm. The second issue has to do with the allocation of risk and uncertainty between the social partners when negotiating the financing and final value of promised retirement income. The institutional framework of collective decision-making common to many of Germany’s largest firms is under pressure; three models of investment decision making relevant to pension assets and liabilities are used to illustrate this point. In doing so, we suggest that the German model is more fragile than commonly realized. We also suggest that Anglo-American management practices have penetrated and affected German corporate (national and regional) institutions and regulations. The social market lauded by advocates of stakeholder capitalism is changing rapidly, at least in the sphere of large firms and global finance.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Authors
- Publisher:
- Blackwell Publishing
- Journal:
- Transactions of the Institute of British Geographers More from this journal
- Volume:
- 27
- Issue:
- 1
- Pages:
- 91-110
- Publication date:
- 2002-03-01
- DOI:
- EISSN:
-
1475-5661
- ISSN:
-
0020-2754
- Language:
-
English
- Keywords:
- Subjects:
- UUID:
-
uuid:025e1d78-b599-49b7-bc15-8db94f1fc21b
- Local pid:
-
ora:1890
- Deposit date:
-
2008-05-02
Terms of use
- Copyright holder:
- Royal Geographical Society (with The Institute of British Geographers)
- Copyright date:
- 2002
- Notes:
- The full-text of this article is not available in ORA. Citation: Clark, G. L., Mansfield, D. & Tickell, A. (2002). 'Global finance and the German model: German corporations, market incentives, and the management of employer-sponsored pension institutions', Transactions of the Institute of British Geographers NS, 27(1), 91-110. [Available at http://www.blackwellpublishing.com/journal.asp?ref=0020-2754&site=1].
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