Ruhr Economic Papers
Ruhr Economic Papers #246
The Hazard of Merger by Absorption – Why Some Knappschaften Merged and Others Did not: 1861–1920
by Tobias Alexander Jopp
RWI, 03/2011, 33 S./p., 8 Euro, ISBN 978-3-86788-282-8download
By the mid-19th century, following the Prussian mining reform, German miners‘ combined mutual health and pension funds took on the characteristics of social insurance and underwent a concentration process driven by mergers, liquidations, and unequal internal growth. This paper investigates the determinants of mergers by absorption among Prussian funds combined with quantitative evidence from a regression model, provides new insights into the first social-insurance merger wave in Germany. While most contemporary sources convey the impression that funds were merged to stabilize the entire insurance scheme by sorting out actuarially unviable and financially distressed funds, statistical evidence suggests that funds were absorbed over time primarily because they offered advantages to the absorbing fund and, hence, were quite attractive targets.
JEL-Classification: C41, G22, G23, I31
Keywords: Competing risk; financial distress; insurance; Knappschaft; liquidation; merger; mining
Jopp, T. Alexander (2011), The Hazard of Merger by Absorption: Why Some Knappschaften Merged and Others Not, 1861–1920. Zeitschrift für Unternehmensgeschichte/Journal of Business History 56 (1): 75-101.