Protection of Domestic bank Ownership in France and Germany: The Functional Equivalency of Institutional Diversity in Takeovers

We investigate the character of the market for corporate control (i.e. takeovers) in French and German banking. The key feature of this character is the marked ability of French and German banks to resist unsolicited takeover bids, especially – although not exclusively– those from foreign competitors. We present an institutional perspective to account for the restrained character of takeovers in French and German banking. Our perspective is composed of two elements. First, institutional arrangements are important since they structure power relations among firm stakeholders by providing opportunities, as well as imposing constraints, to influence the decision-making process in which takeover transactions take place. Second, institutional arrangements provide firm stakeholders with several potential opportunities, not just one, to block unsolicited bids since takeover contests are composed of sequences of decisions for which approval is needed at each stage. French and German banks have used different mixes of institutional arrangements, themselves located at different stages of takeover transactions, to secure restrained markets for corporate control. Our institutional analysis, in turn, also illustrates an important shortcoming of banking sector protectionism, namely the contribution of protection from unsolicited takeover bids to the building of banks carrying systemic risks

Political Mediation and American Old-Age Security Exceptionalism

Debates over America’s heavy reliance on employer-provided private pensions have understated the profound role organized labor played after World War II. Archival evidence from prominent unions and business associations suggests that the shift in organized labor’s strategy after the New Deal toward electoral activity helps explain critical interventions by Northern Democrats into the system of private pensioning in the postwar period that laid the foundation for America’s old-age security system. Such a strategy was insufficient, however, to expand Social Security. This article offers a political mediation account of electoral activity as a source of labor influence on social policy that draws on political institutionalist and class power theories