Socio-Economic Review Advance Access published online on May 21, 2009
Socio-Economic Review, doi:10.1093/ser/mwp011
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Recomposed institutions: smaller firms' strategies, shareholder-value orientation and bank relationships in Germany
1 Department Social Science, University Osnabrück, Osnabrück, Germany
2 Collaborative Research Centre 580, Friedrich Schiller University of Jena, Jena, Germany
* Correspondence: katharina.bluhm{at}uni-osnabrueck.de
Small- and medium-sized enterprises (SMEs) are embedded differently in institutional spheres than large corporations. This influences how they are affected by institutional change. Based on our observations, scholars of the transforming German coordinated market economies are mostly focusing on large enterprises. In contrast, we explore how institutional change in the financing sector affects privately owned SMEs, especially those engaged in manufacturing. Additionally, we asked who is pushing SMEs towards a stronger shareholder-value orientation and how they respond to these changes. Although the direct impact of capital market actors on German SMEs is still limited, we find a diffusion of advanced management tools, which is linked in the literature to the shareholder-value concept, and a redefinition of firm–bank relationships without embracing the arms'-length, equity market-oriented mode of finance. These two features constitute a recomposition that includes institutional continuity as well as change.
Key Words: small- and medium-sized firms • varieties of capitalism • financing • corporate governance • shareholder value • institutional embeddedness