European Integration and the Clash of Capitalisms: Political Cleavages over Takeover Liberalization

Abstract

The integration of national markets for corporate control continues to lag behind the removal of barriers to trade in goods and services. To what extent does the protracted political battle over legal harmonization in this area reflect a clash of interests between liberal and coordinated national varieties of capitalism? To find out, we map the distribution of political support for liberal takeover rules within and across countries by analyzing a roll-call vote on the takeover directive in the European Parliament in July 2001. Our data show that, in line with the clash-ofcapitalisms hypothesis, nationality did trump party group position on a left-right axis as a predictor of delegates' attitudes toward takeover regulation. Given the increasing interference of European Union-level legislative initiatives with the regulatory pillars of coordinated market economies, and the accession of 10 new Eastern European member states, we expect the salience of the clash-of-capitalisms cleavage to increase in the near future.

Constrain-Thy-Neighbor Effects as a Determinant of Transnational Interest Group Cohesion

“…Casual evidence supports this hypothesis. In the case of the EU takeover directives, where German employers disagreed with Brit-ish employers, German parties on the left and right stood up for German employers' demands -most visibly in the European Parliament, where the 2001 directive was rejected by all but one of Germany's 99 delegates (Callaghan/Höpner 2005). In the case of the EU worker participation directives, where German employers agreed with British employers, their demands were largely ignored by German politicians on the left and right.…”

“…Besides illustrating a widely applicable argument on the incentives for cross-border alliance formation, the case studies also speak to a more specialized literature on the clash of capitalisms in the European political arena (Callaghan/Höpner 2005;Menz 2005; Höpner/Schäfer 2008). According to Vitols (2001), rules governing takeovers and worker participation are thought to shape the comparative institutional advantages enjoyed by companies in Germany and the UK.…”

When Europe Hits Home: How Europeanization Triggers the Conflict of Capitalism in the German System of Corporate Control

“…4;Callaghan & Höpner, 2005). For the first time, national authorities became aware of the effect European legislation might have on the continuity of "their" capitalist systems.…”

Who Cares About Financialization? Explaining the Decline in Political Salience of Active Markets for Corporate Control

“…Takeover regulation was once a central battleground in political struggles between the advocates of shareholder-and stakeholder-oriented varieties of capitalism. At the European Union level, a directive aimed at facilitating takeover bids encountered stiff resistance for thirty years before a watered down version was finally passed in 2003 (Callaghan/Höpner 2005). At the national level, many European countries -including France and Germany -abstained from taking any measures to promote active markets for corporate control until well into the 1980s or 1990s (Callaghan 2009).…”