Studies

The economic damage of decoupling in Germany

Scenarios at national, local and sectoral level

2023

The study “The economic damage of decoupling in Germany” calculated scenarios for both the country as a whole and for its 400 individual districts. Large family businesses would be particularly affected. In their case, the benefits of the international distribution of labour far outweigh the negative impact of interrupted supply chains or closed sales markets.

Regulatory and financial burdens of EU legislation in four Member States – a comparative study

Vol. 3: Burdens arising from the transparency register of the Anti-Money Laundering Directive

2023

The research project on the costs of bureaucracy extends to four volumes on four different regulations. Part three is dedicated to the transparency register. Here the information required in four member countries of the EU was examined along with the economic costs to companies that result in practice.

Regulatory and financial burdens of EU legislation in four Member States – a comparative study

Vol. 2: Burdens arising from the Posting of Workers Directive

2023

The research project on the costs of bureaucracy extends to four volumes on four different regulations. Part two is dedicated to the posting of workers. Here the information required when applying for such a certificate in four member countries of the EU was examined along with the economic costs to companies that result in practice.

Dual Apprenticeship and Continuing Vocational – Education and Training in Central and Eastern Europe

Opportunities and Obstacles for German Family Businesses

2023

The growth potential for family businesses in Central and Eastern Europe is vast, but skilled workers are in short supply. The study Dual Apprenticeship and Continuing Vocational Education and Training in Central and Eastern Europe examines for the first time how family businesses in the region are providing vocational training and offers recommendations for action.

Country Index for Family Businesses

Competitiveness ranking, 9th edition summary

2023

The country index prepared by the Centre for European Economic Research based in Mannheim, Germany, examines business location conditions for family companies in 21 industrial countries. The index has been compiled nine times since 2006. Germany has fallen six places in the ranking during this period. It has regressed in the areas of taxes, regulation and infrastructure. The country’s labour-production ratio has also moved in an unfavourable direction

Regulatory and financial burdens of EU legislation in four Member States – a comparative study

Vol. 1: Regulatory and financial burdens arising from the A1 Certificate

2023

The research project on the costs of bureaucracy extends to four volumes on four different regulations. Part one is dedicated to the A1 certificate. Here the information required when applying for such a certificate in four member countries of the EU was examined along with the economic costs to companies that result in practice.

Entrepreneurial co-determination in the Societas Europaea (SE)

On the further development of the negotiating solution

2022

Are the co-determination rights of German employees protected when a company is converted into a SE? Or must changes be made, as Germany’s three-party coalition government has announced? The Foundation for Family Businesses had this question addressed in a legal opinion written by Professor Christoph Teichmann of the University of Würzburg.

Listed Family Firms in Europe

Relevance, characteristics and performance

2022

Publicly traded family businesses in Europe do business with a longer-term perspective and more successfully than companies that are not family businesses – and the greater the influence of the founding family, the better their performance. This is the conclusion reached by the study of an international research team directed by Dr. Marc Steffen Rapp, Professor of Economics at the Philipps-Universität Marburg.

Sustainability-Reporting under the CSRD: Standard Setting and its Conformity with EU Law

2022

The procedure for setting sustainability reporting standards is de facto a privatisation of EU sovereignty which is not covered by the EU treaties. This is the conclusion of an expert opinion by Martin Nettesheim, Professor of Constitutional, Administrative, European and International Law at the University of Tübingen. Nettesheim points out that in the process, provisions of Germany’s Basic Law would also be violated.

European Trade Policy at the Service of Geopolitics?

Requirements for New Instruments from the Perspective of Family Businesses

2022

Last year, a total of 1,700 new protectionist measures were introduced around the world. This marks a new record. Even before the war in the Ukraine, political disputes were increasingly handled using economic sanctions – an approach which leads to high economic costs. Family companies in particular are dependent on the international division of labour.

Free Enterprise and State Control

Annual Bulletin of the Advisory Board of the Foundation for Family Businesses

2022

The authors Clemens Fuest, Udo di Fabio and Gabriel Felbermayr examined the efficiency of state intervention using various examples in order to analyse whether the same goals could not be achieved better and at lower cost though other instruments. Their conclusion: not everything well intended is also well done. Close control of companies leads to excessive demands.

Transatlantic Restart

Proposals for trade cooperation between the EU and the United States

2021

The economic impact of punitive US tariffs affect not only the aircraft industry, but also European family businesses: manufacturers of alcoholic beverages (e.g. spirits and wine producers) are the second most severely affected group. Confectionery manufacturers and the toolmaking industry have also suffered. Professor Gabriel Felbermayr, PhD, Head of the Kiel Institute for the World Economy, proposes a tariff agreement or at least the mutual offsetting of punitive tariffs between the United States and EU. 

The EU Proposal for Country-by-Country Reporting on the Internet

Costs, Benefits and Consequences

2021

As a result of the confidential sharing of data among tax authorities in different jurisdictions, effective tax rates have risen by between one and two percentage points. This demonstrates that the rules in place are working. By contrast, the publication of sensitive corporate data online makes no clearly verifiable contribution to the fight against tax evasion, money laundering and terrorism financing. On the contrary, it can result in unjustified competitive disadvantages for the companies concerned. This is one of the conclusions drawn by a study commissioned by the Foundation for Family Businesses and conducted by the Leibniz Centre for European Economic Research (ZEW).

Assessing Regulatory Impact on Family Businesses

A Family Business Test for Germany and the EU

2020

The Foundation for Family Businesses has developed a model that can be used to illustrate the impact of proposed laws on family businesses at an early stage. The objective of the test is for family companies to receive the consideration in the legislative process that they deserve as a cornerstone of our economy.

Trade Conflicts with Side Effects

Compensation for Innocent Bystanders when Imposing Punitive Tariffs

2020

The punitive tariffs and countervailing customs duties imposed by the USA lead to substantial competitive disadvantages for family businesses in Europe. A study commissioned by the Foundation for Family Businesses draws the conclusion that the trade disputes between the USA and the European Union are meanwhile spilling over to industries that have nothing to do with the original trade conflict. Family companies are affected the most by countervailing customs duties imposed by the USA.

Länderindex Familienunternehmen

Locational factors: Emerging Markets - Second edition (German)

2020

Irrespective of political tensions and concerns about democracy and the rule of law, recent years have seen Turkey, Russia and China expand their attractiveness as business locations. This was one conclusion of the “Länderindex Familienunternehmen – Emerging Markets” (“Country Index for Family Businesses – Emerging Markets”), a study which the Leibniz Centre for European Economic Research (ZEW) carried out for the Foundation for Family Businesses. The study ranks Russia in first place, followed by Turkey and China.

Listed Family Businesses in Germany

2019

The public as a company sanction

The constitutional limits of “shame sanctions”

2019

Family Businesses in Germany and the United States since Industrialisation

A long-term historical study

2019

In a long-term historical study, the Foundation for Family Businesses examines why such fundamentally different business landscapes arose in Germany and in the United States. Family companies in Germany have evolved into a strong pillar of the German economy over centuries. But their role in the United States is smaller. The study was prepared by the economic historian Prof. Dr. Hartmut Berghoff and private lecturer Dr. Ingo Köhler, both of the University of Göttingen. As part of their research, they explored nearly 250 years of economic history in the United States and Germany.

The economic significance of family businesses

Fifth edition

2019

Family businesses are the job engines of the German economy: in recent years they have created more jobs than those DAX companies with dispersed ownership. This is one of the conclusions drawn in the fifth edition of the study series “The economic significance of family businesses”. Between 2007 and 2016, Germany’s 500 largest family businesses expanded their employment in Germany by 23 percent to 2.54 million people. In contrast, the 27 DAX companies that are not family businesses were only able to increase employment by 4 percent – to 1.55 million. Measured in revenue as well, the top 500 family businesses outpaced the 27 DAX companies, increasing their group-wide sales by 36 percent between 2007 and 2016. The 27 DAX companies increased their sales by only 29 percent.

Aspects of Company Transparency

Yearbook of the Advisory Board of the Foundation for Family Businesses

2019

The shareholders of family businesses are particularly affected in a variety of ways by transparency requirements. The Advisory Board of the Foundation for Family Businesses has been examining the different aspects of company transparency: in four articles, members of the Advisory Board explain the effects of the requirements on company shareholders, the family and the business.

Disclosure Requirements of Family Companies

Analysis of status quo and assessment under data protection law

2018

International tax competition from a company perspective

Annual Monitor of the Foundation for Family Businesses

2018

A substantial majority of German companies assesses international tax competition as strong or very strong. When surveyed about the effects on their operations, large family businesses in particular cite negative consequences around twice as often as large companies that are not family-owned, suggesting that tax competition does not affect the German economy uniformly. For the companies surveyed, it is not an option for the federal government simply to do nothing. These companies expect a reduction in bureaucratic hurdles, better international coordination to contain tax evasion and lower corporate tax rates. The ifo Institute surveyed 1,250 family-owned and non family-owned businesses for this study on behalf of the Foundation for Family Businesses, making it the largest survey on the subject of tax competition.

International tax competition

Analysis, current trends and conclusions for fiscal policy

2018

In recent years, international competition to attract companies with low taxes has been hotly debated by both politicians and the media. Exposure of the diverse tax-avoidance strategies pursued by a number of large multinationals has underscored the extent to which these strategies are aided and abetted by individual countries. The media debate has triggered widespread political activity to prevent what are considered to be unfair practices in tax competition, and the recent tax reform in the United States has raised interest in this topic even further: The prevailing opinion is that the big corporate tax cuts implemented in the world’s biggest economy could trigger a new round of competitive tax-cutting.

Skilled workers for digital transformation

Labour-market situation and opportunities for shaping digitalisation

2018

The present study is the most comprehensive and detailed analysis thus far on the situation as regards skilled workers in four occupational fields of importance for Germany’s digital transformation: mechanical and automotive engineering; mechatronics, energy and electrical technology; IT; technical research and development. An analysis of 389 online job advertisements showed that the occupational fields examined are of particular relevance when it comes to the personnel sought by family businesses.
 

Country Index for Family Businesses

Competitiveness ranking, 7th edition summary

2018

This update of the Country Index for Family Businesses evaluates Germany’s attractiveness as a location for family businesses for the seventh time since 2006. Conceived as a location comparison that specifically encompasses the perspective of large family businesses, the index analyses and compares criteria that are important to such businesses in Germany with those in competitor countries. The full German version of the Country Index for Family Businesses has been published by the Foundation for Family Businesses. The English text presented here summarizes the main findings of the original version.

The EU Proposal for Country-by-Country Reporting on the Internet

Costs, Benefits and Consequences

2017

The European Commission wants internationally active enterprises with a turnover of more than 750 million Euros to publish sensitive company data on the internet. The so-called Country-by-Country Reporting (CbCR) is supposed to apply to every country in which the company is established. Competitors not covered by the provision could use the information without being compelled to publish comparable data themselves. The present study by ZEW Mannheim analyses possible consequences of this provision for big family companies as well as for the BEPS process („Base Erosion and Profit Shifting“).

Country Index for Family Businesses

6th edition with special analysis on foreign trade risk / Brexit

2016

The Country Index study has been conducted every two years since 2006 by the Centre for European Economic Research (ZEW), Mannheim, on behalf of the Foundation for Family Businesses. It is based on international and national statistics. They are analysed to determine the attractiveness of a particular location for large family-owned enterprises in the manufacturing sector in the EU and US. The index assumes a model family business with an annual turnover of €210 million.

The following six criteria are analysed: taxation; labour costs, productivity and human capital; regulation; financing; infrastructure and institutions; and energy. Sub-indices are formulated for the individual criteria and included in the main index.

The countries compared in the index are: Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Poland, Slovakia, Spain, Sweden, Switzerland, the United Kingdom and the United States.

Country Index for Family Businesses

Locational factors in emerging markets

2018

Among major emerging markets, Turkey and Russia offer family firms the most attractive business conditions. However, in light of constitutional developments in these countries, China is fast catching up. This was the finding of the “Country Index for Family Businesses – Emerging Markets” study prepared by the Centre for European Economic Research (ZEW Mannheim) for the Foundation for Family Businesses.

Germany’s next generation of business owners

An empirical study of values, attitudes and future plans. 4th edition with a focus on "Digitalisation"

2017

The study "Germany’s next generation of business owners" forms part of a long-running research project for which the Friedrichshafen Institute for Family Entrepreneurship | FIF at Zeppelin University carries out regular data surveys across Germany on behalf of the Foundation for Family Businesses.

Download the study (German)

Corporate investment policy and the factors influencing it

Annual Monitor of the Foundation for Family Businesses 2017

2017

Cutting red tape would significantly boost the willingness of family-owned businesses to step up investment in Germany, according to one finding of the Annual Monitor of the Foundation for Family Businesses, a survey based on the most comprehensive data gathered on family-owned firms in the German-speaking world. The Munich-based ifo Institute produced the report on behalf of the Foundation. Over 1,500 family and non-family businesses of all sizes and from a wide variety of industries took part in the survey. In future, the survey will consist of a panel of the same 600 companies at a minimum. Further surveys and analyses will be carried out at least once a year.

Go to press release "Bureaucracy inhibits willingness to invest"

The report was picked up by various news outlets, including Die Welt: "Investieren schwer gemacht" (Investment made difficult)

Internationalisation of family firms – proposed reforms to exit taxation

2017

If an owner of a family firm moves to a non-EU country, payment of exit taxes will be immediately demanded on their share of the business – at the same level as their personal income tax rate. Although there are options for deferral, these are not standardised, but depend on the particular country concerned and the agreements it has with the German financial authorities. Exit taxation jeopardises the very substance of family-owned firms and consequently discourages owners from internationalising the business. The Foundation for Family Businesses proposes some reforms which Professor Stephan Kudert from the European University Viadrina in Frankfurt (Oder) examines in the present study.

Media outlets such as the „Frankfurter Allgemeine Zeitung“ (FAZ) and „Börsen-Zeitung“ picked up the story and reported on the Foundation's findings.

An international comparison of wealth taxes

2017

What would be the impact of a wealth tax on German family firms? This is the question addressed by the Centre for European Economic Research (ZEW) in this new study conducted on behalf of the Foundation for Family Businesses. Summing up its findings, the report’s author Professor Christoph Spengel says: “The interplay of income, wealth and inheritance taxes could result in a confiscatory burden and effective tax rates of over 100 percent. Any return on assets would therefore be completely eaten up by taxes, and business assets would be eroded to cover the remainder of the tax payment.”

The economic significance of family businesses

2017

For more than a decade now, the Foundation for Family Businesses has regularly commissioned the Centre for European Economic Research (ZEW) and the Institute for SME research and entrepreneurship in Mannheim (ifm) to conduct studies on the economic importance of German family businesses.

Our short film summarises the key statistics (2014), such as the share of the workforce and revenues accounted for by family businesses, their significance on the stock exchange and their equity base.

Trends in income inequality: facts, figures and perceptions

2016

In a report commissioned by the Foundation for Family Businesses, the ifo Institute found that income inequality is perceived to be much greater than is actually the case. One of the report’s most significant findings is that income disparities among the working population have declined over the past decade. If the entire labour force is included – i.e. both the employed and the unemployed – it is clear that inequality in gross real wages has greatly decreased as a result of the Hartz reforms. The study also shows that Germany’s fiscal and social security system is making a significant contribution to evening out income disparities.

International transfer prices – challenges and potential solutions for family businesses

2015

Fiscal frameworks – and in particular how transfer prices are calculated – directly impact the competitiveness of internationally active family enterprises.

The bureaucratic overhead involved in transfer pricing is onerous not only for large family-owned businesses, but for tax authorities too. There are also further obstacles: companies find it very difficult to obtain binding statements from the tax authorities and divergences in their practice often only come to light during tax audits. In view of the numerous practical problems involved, the Foundation for Family Businesses – supported by the Baden-Württemberg Chamber of Commerce and Industry – initiated this scientific study.

Along with empirical data on transfer pricing disputes and resolution techniques, Professor Andreas Oestreicher (Faculty of Economics at Göttingen University) and Professor Ekkehart Reimer (Institute for Financial and Tax Law, Law Faculty, University of Heidelberg) also present an international comparison of normative frameworks and administrative practice. They furthermore go on to develop proposals on how the burden of transfer pricing could be alleviated for companies and tax authorities.