Corporate governance and employee power in the boardroom: An applied game theoretical analysis

Benjamin Balsmeier, Andreas Bermig, Alexander Dilger () and Hannah Geyer

No 9/2011, Discussion Papers of the Institute for Organisational Economics from University of Münster, Institute for Organisational Economics

Abstract: The discussion about employee representation on supervisory boards has received much attention from scholars and politicians around the world. We provide new insights to this ongoing debate by employing power indices from game theory to examine the real power of employees on boards and its effect on firm performance. Based on unique panel data of the largest listed companies in Germany, we find an inversely U-shaped relationship between labour power and Tobin's Q with a value-maximising labour power of approximately 43 %. Our results are robust to different game theoretical calculations of labour power, as well as various econometric models.

JEL-codes: C71 D72 J53 K22 K31 L21 L25 M21 M54 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec
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Journal Article: Corporate governance and employee power in the boardroom: An applied game theoretic analysis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:umiodp:92011

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