Venture Capitalists on Boards of Mature Public Firms
Ugur Celikyurt, Merih Sevilir, Anil Shivdasani
Review of Financial Studies,
No. 1,
2014
Abstract
Venture capitalists (VCs) often serve on the board of mature public firms long after their initial public offering (IPO), even for companies that were not VC-backed at the IPO. Board appointments of VC directors are followed by increases in research and development intensity, innovation output, and greater deal activity with other VC-backed firms. VC director appointments are associated with positive announcement returns and are followed by an improvement in operating performance. Firms experience higher announcement returns from acquisitions of VC-backed targets following the appointment of a VC director to the board. Hence, in addition to providing finance, monitoring and advice for small private firms, VCs play a significant role in mature public firms and have a broader influence in promoting innovation than has been established in the literature.
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The Ex Ante versus Ex Post Effect of Public Guarantees
H. Evren Damar, Reint E. Gropp, Adi Mordel
The Role of Central Banks in Financial Stability: How has it Changed?,
2013
Abstract
In October 2006, Dominion Bond Rating Service (DBRS) introduced new ratings for banks that account for the potential of government support. The rating changes are not a reflection of any changes in the respective banks’ credit fundamentals. We use this natural experiment to evaluate the consequences of bail out expectations for bank behavior using a difference in differences approach. The results suggest a striking difference between the effects of bail out probabilities during calm times (“ex ante”) versus during crisis times (“ex post”). During calm times, higher bail-out probabilities result in higher risk taking, consistent with the moral hazard view and much of the empirical literature. However, in crisis times, we find that banks with higher bail out probabilities tend to increase their risk taking less compared to banks that were ex ante unlikely to be bailed-out. Charter values are one part of the explanation: Supported banks may have a funding advantage relative to non-supported banks during the crisis. However, we cannot rule out that other factors also may be playing a role, including tighter supervision of supported banks in crisis times.
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Economy Picking Up – Put Budget Surpluses To Good Use: Joint Economic Forecast Autumn 2013
Dienstleistungsauftrag des Bundesministeriums für Wirtschaft und Technologie,
2013
Abstract
The German economy is on the verge of an upturn driven by domestic demand. The improving global economic climate and decreasing uncertainty are fuelling investment. Private consumption is benefitting from favourable employment and income prospects. Real gross domestic product looks set to grow by 1.8 percent in 2014, after an increase of just 0.4 percent this year. Consumer prices are expected to rise by a moderate 1.6 percent this year and by 1.9 percent next year. The German public budget will continue to show a surplus.
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Gemeindegröße, Verwaltungsform und Effizienz der kommunalen Leistungserstellung – Das Beispiel Sachsen-Anhalt
Peter Haug
Raumforschung und Raumordnung,
No. 4,
2013
Abstract
Municipality Size, Institutions and Efficiency of Municipal Service Provision: The Case of Saxony-Anhalt: In this contribution we analyze the determinants of the efficiency of municipal service production using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a robust non-parametric frontier estimation (Convex order-m).The results reveal e.g. no efficiency deficits of municipal associations and a significant impact of demographic factors and settlement structures.
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Bottom-up or Direct? Forecasting German GDP in a Data-rich Environment
Katja Drechsel, Rolf Scheufele
Abstract
This paper presents a method to conduct early estimates of GDP growth in Germany. We employ MIDAS regressions to circumvent the mixed frequency problem and use pooling techniques to summarize efficiently the information content of the various indicators. More specifically, we investigate whether it is better to disaggregate GDP (either via total value added of each sector or by the expenditure side) or whether a direct approach is more appropriate when it comes to forecasting GDP growth. Our approach combines a large set of monthly and quarterly coincident and leading indicators and takes into account the respective publication delay. In a simulated out-of-sample experiment we evaluate the different modelling strategies conditional on the given state of information and depending on the model averaging technique. The proposed approach is computationally simple and can be easily implemented as a nowcasting tool. Finally, this method also allows retracing the driving forces of the forecast and hence enables the interpretability of the forecast outcome.
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Federal grants for local development to stop economic decline? – Lessons from Germany
Peter Haug, Martin T. W. Rosenfeld
Consequences of the International Crisis for European SMEs – Vulnerability and resilience. Routledge Studies in the European Economy, Routledge,
2012
Abstract
The chapter analyses theoretically and empirically the supply-side effects of the public investments funded by the German „Economic Stimulus Package II“(Konjunkturpaket II), which was implemented in 2009. In the theoretical part, we address the distortionary effects of investment grants on public capital provision and local economic development. According to the theoretical literature on the efficient provision of public goods, public inputs and economic growth, conditional investment grants have several negative allocation effects: First, they distort the relative factor prices for the local government stimulating excess public capital stocks and Pareto-inefficient provision of public goods. Second, long-term growth-enhancing effects of debt-financed public investment could only be expected for public inputs, which either directly increase the productivity of the private sector or increase factor productivity, especially by increasing the stock of human capital. In the empirical part, we find that despite of the recent increase in municipal investments in the German state of Saxony our regression results do not confirm a connection with the ESPII funds. Furthermore, no relationship between the municipal fiscal strength and the amount of ESPII grants received could be found. All in all, due to the focus of the grants on public consumption goods rather than public inputs only marginal future growth effects can be expected from the subsidized investments.
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What Drives Innovation Output from Subsidized R&D Cooperation? — Project-level Evidence from Germany
Michael Schwartz, Michael Fritsch, Jutta Günther, François Peglow
Technovation,
No. 6,
2012
Abstract
Using a large dataset of 406 subsidized R&D cooperation projects, we provide detailed insights into the relationship between project characteristics and innovation output. Patent applications and publications are used as measures for the innovation output of an R&D project. We find that large-firm involvement is strongly positively related with the number of patent applications, but not with the number of publications. Conversely, university involvement has positive effects on projects’ innovation output in terms of the number of publications but not in terms of patent applications. In general, projects’ funding as measure of projects’ size is an important predictor of the innovation output of R&D cooperation projects. No significant effects are found for the number of partners as (an alternative) measure of projects’ size, for spatial proximity between cooperation partners, for the involvement of a public institute for applied research, and for prior cooperation experiences. We derive conclusions for the design of R&D cooperation support schemes.
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International Fragmentation of Production and the Labour Input into Germany’s Exports – An Input-Output-analysis
Hans-Ulrich Brautzsch, Udo Ludwig
IWH Discussion Papers,
No. 14,
2011
Abstract
The import penetration of exports has become a topic of public debate, particularly in the context of Germany’s position as one of the world’s leading exporters. The growth in the volume of intermediate products purchased from abroad for subsequent processing into export goods in Germany seems to be undermining the importance of exports as a driver of domestic production and employment. The gains that arise from an increase in exports seem to have been offset by the losses caused by the crowding out of local production by imports. Empirical evidence on the impact of this international integration of the goods market on the German labour market is ambiguous. Short-term negative effects on employment are claimed to be offset by the long-term benefit that the jobs lost in the short run will eventually be replaced by higher-skilled jobs with better
perspectives. Against this background, the following hypothesis is tested empirically: Germany is poor in natural resources, but rich in skilled labour. In line with the Heckscher- Ohlin theory, Germany should therefore specialize in the production of export goods and services that are relatively intensive in these factors and should import those goods and services that are relatively intensive in unskilled labour. The empirical part of the paper deals with the extent of the German export penetration by imports. At first, it analyses by what ways imports are affecting the exports directly and indirectly and shows the consequences of import penetration of exports for the national output and employment. Secondly, consequences for employment are split in different skill types of labour. These issues are discussed with the standard open static inputoutput- model. The data base is a time series of official input-output tables. The employment effects for Germany divided by skill types of labour are investigated using skill matrices generated by the authors.
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Upturn in Saxony-Anhalt in between structural Barriers
Udo Ludwig, Brigitte Loose
Wirtschaft im Wandel,
No. 7,
2011
Abstract
The gross domestic product of Saxony-Anhalt will increase by 2.6% in 2011. Due to structural reasons the growth is lower than in Germany. In Saxony-Anhalt the key growth driver, the engineering industry, are poorly represented. The previously strong food industry suffers under the pressure of rising commodity prices. The growth gap is explained also from a slowing dynamics in the industry later this year, what is already indicated in the intermediate goods sector, which is the most important part in Saxony-Anhalt´s industry. In addition, the dynamics of household demand for consumer goods and housing is weaker because of the sharp decline in population. Furthermore, the government sector slows in connection with the consolidation of public budgets. The growth gap compared to the average of the New Federal States in total also stems from the fact that the recovery in Saxony-Anhalt had progressed rapidly in the previous year.
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Environmental Protection and the Private Provision of International Public Goods
Martin Altemeyer-Bartscher, Dirk T. G. Rübbelke, E. Sheshinski
Economica,
2010
Abstract
International environmental protection like the combat of global warming exhibits properties of public goods. In the international arena, no coercive authority exists that can enforce measures to overcome free-rider incentives. Therefore decentralized negotiations between individual regions serve as an approach to pursue efficient international environmental protection. We propose a scheme which is based on the ideas of Coasean negotiations and Pigouvian taxes. The negotiating entities offer side-payments to counterparts in order to influence their taxation of polluting consumption. Side-payments, in turn, are self-financed by means of externality-correcting taxes. As we show, a Pareto-efficient outcome can be attained.
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