From National Diversity towards Transnational Homogenization? - German Corporate Governance Regulation Between Market and Multi-Level Governance.

The paper presents empirical results from a study of the transformation of corporate governance regulation in Germany. The German corporate governance regime used to be the prototype of a network-oriented "insider" system. In light of the internalization of trade and finance, the efforts of the European Union to create a harmonized legal framework for the single market and the changing strategies of big corporations and institutional investors, political and economic actors find themselves under increasing pressure to move towards a market-oriented, Anglo-Saxon model. In our paper, we trace the patterns and driving forces of change in two areas of corporate governance regulation, namely internal governance, in particular the composition and the functioning of a company's board, and accounting/auditing. In both cases, we observe a substantial transformation as regulation has been brought more into line with Anglo-Saxon norms and practices. Yet, the comparison of the two regulatory fields reveals significant differences in terms of the outcomes of transformation as well as the driving forces and mechanisms. In accounting and auditing, processes of multilevel coordination entailed a high degree of convergence towards Anglo-Saxon standards and regulatory requirements. Moderate convergence and a much greater stability of the domestic institutional framework can be seen in the case of internal governance, where rule competition instigated regulatory adaptation at the national level. While the two relevant strands of political economy, Comparative Political Economy and International Political Economy, offer important insights for analyzing these changes, both fail to account for the different patterns of convergence and divergence in the two cases. Therefore, we argue that the political economy approaches have to be combined with a policy analysis perspective so as to capture the sectorally distinct interplay of national and transnational actors which was crucial for shaping the processes and the results of regulatory regime transformation. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]