Abstract
This paper examines how Germany’s hallmark co-determination system, i.e., worker representation on corporate boards, relates to firms’ distributive, innovation, and investment outcomes in the post-pandemic period. Using the latest firm-level data from medium to large German companies for 2023–2024, I compare firms with no employee board members with those having one-third employee representation, and parity (50%) representation. The analysis shows that co-determination is associated with a higher labour share of value added, particularly among non-manufacturing firms, and with a slightly higher intensity of capital investment. By contrast, no statistically significant relationship emerges between co-determination and R&D intensity once sectoral composition is considered. In this case, the limited sample and short time frame prevented conclusions on the innovation effects of firms. Taken together, however, these results suggest that co-determined firms are more worker-oriented in the distribution of value and maintain at least comparable, if not slightly stronger, investment effort, without evidence of efficiency losses. Only the evidence on innovation remains tentative, because more data needs to be collected on this particular point. Overall, the findings support the view that co-determination promotes equitable and stable corporate behavior, compatible with long-term performance and sustainable growth.