The Lander are the building blocks of the German capital market

Data on major voting blocks in the German officially listed companies for the end of 1997 and May 2001 are used in order to explore the spatial dimensions of the system of corporate control. Listed companies are very unevenly distributed, and their institutional and geographical concentration has not decreased. Holdings of voting blocks in companies are, in turn, getting more and more dispersed, but the majority of corporate control is still intraregional, with the holders of voting rights coming from the same Lander as the controlled corporations. Gravity equations show that distance is a very strong determinant of corporate control links, and its role applies to all types of companies and holders, though to a varying degree. From the perspective of corporate control, the German capital market is very regionalized. Considering that the study spans a short period of time, however, the pace of integration is pronounced.