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IN RECENT YEARS, ELECTRONIC COMMUNICATION EXPERIENCED SIGNIFICANT IMPROVEMENTS THROUGH NEW WEB 2.0 SOLUTIONS. HEREBY, NEW ELECTRONIC COMMUNICATION SYSTEMS OPENED COMPLETELY NEW POSSIBILITIES FOR COMMUNICATION. HOWEVER, NEW RISKS (E.G., INFORMATION OVERLOAD) EMERGED AS WELL. THIS ARTICLE PRESENTS AN EMPIRICAL INVESTIGATION ON THE USE OF ELECTRONIC COMMUNICATION SYSTEMS FOR INFORMATION SHARING AND ON THE INFLUENCE ON EMPLOYEES’ PERFORMANCE.
THIS PROJECT PROVIDES A PERFORMANCE MEASURE ON THE EFFECT OF LATENCY IN THE CONTEXT OF THE COMPETITIVE ADVANTAGE OF IT. BASED ON A DATASET OF DEUTSCHE BÖRSE’S ELECTRONIC TRADING SYSTEM XETRA, AN EMPIRICAL ANALYSIS IS APPLIED. THAT WAY, WE QUANTIFY THE IMPACT OF LATENCY FROM A CUSTOMER’S POINT OF VIEW.
IN TWO-SIDED MARKETS SUCH AS EXCHANGES, AN INTERMEDIARY BRINGS TOGETHER TWO DISTINCT CUSTOMER POPULATIONS, E.G., BUYERS AND SELLERS. THESE CUSTOMER POPULATIONS INTERACT VIA A PLATFORM PROVIDED BY THE INTERMEDIARY, AND TYPICALLY NETWORK EFFECTS ARE OBSERVABLE IN THESE MARKETS; IF THE NUMBER OF BUYERS IS HIGH, MORE SELLERS ARE ATTRACTED TO THE PLATFORM, AND VICE VERSA. IN SUCH MARKETS IT IS DIFFICULT TO MEASURE THE ECONOMIC SUCCESS OF IT INVESTMENTS. THIS ARTICLE PROPOSES A SOLUTION.
Customer empowerment 2.0
(2011)
Only around one in five firms reap the anticipated benefits from Service Oriented Architectures (SOA). Industry analysts assume that a lack of SOA governance is the main reason why SOA projects fail. And, indeed, the vast majority of the literature is on technical issues, and a business value and governance view is missing. So, what do SOA governance mechanisms help to implement an effective SOA that achieves IT flexibility and reuse?
Interview with Andreas Kern, CEO wikifolio.com
The digital revolution
(2013)
BANK INSTABILITY SEEMINGLY COULD PUSH BORROWERS TO USE CROWDFUNDING AS A SOURCE OF EXTERNAL FINANCE. WE CONSTRUCT A NOVEL, HAND-COLLECTED DATA SET OF VENTURES' USES OF EQUITY CROWDFUNDING IN GERMANY, THEIR RELATIONSHIPS WITH BANKS, AND VARIOUS VENTURE TRAITS SINCE 2011. BY OBSERVING VENTUREBANK RELATIONSHIPS, WE CAN IDENTIFY IF VENTURES CONNECTED TO SHOCKED BANKS ARE MORE LIKELY TO USE CROWDFUNDING IN AN ATTEMPT TO SUBSTITUTE FOR CONTRACTING BANK CREDIT SUPPLY. OUR RESULTS SHOW THAT CROWDFUNDING IS SIGNIFICANTLY MORE LIKELY FOR NEW VENTURES THAT INTERACT WITH STRESSED BANKS. INNOVATIVE FUNDING SOURCES ARE THUS PARTICULARLY RELEVANT IN TIMES OF STRESS AMONG CONVENTIONAL FINANCIERS. BUT CROWDFUNDED VENTURES ARE GENERALLY ALSO MORE OPAQUE AND RISKY THAN NEW VENTURES THAT DO NOT USE CROWDFUNDING.
Analyzing the relationship between differentiated online sentiment and company-specific stock prices
(2015)
PRACTITIONERS AND RESEARCHERS ALIKE INCREASINGLY USE SOCIAL MEDIA MESSAGES AS AN ADDITIONAL SOURCE OF INFORMATION WHEN DEALING WITH STOCKS. BASED ON EMOTION THEORY AND AN ESTABLISHED SENTIMENT LEXICON, WE DEVELOP AND APPLY AN OPEN SOURCE DICTIONARY FOR THE ANALYSIS OF SEVEN DIFFERENT EMOTIONS IN 5.5 MILLION TWITTER MESSAGES ON 33 S&P 100 COMPANIES. WE FIND VARYING EXPLANATORY POWER OF DIFFERENT EMOTIONS (ESP. HAPPINESS, AND DEPRESSION) FOR COMPANY-SPECIFIC STOCK PRICE MOVEMENTS OVER A PERIOD OF THREE MONTHS.
COMPANIES USE SOCIAL MEDIA IN GENERAL AND MICROBLOGGING IN PARTICULAR FOR DIFFERENT PURPOSES, SUCH AS REPUTATION MANAGEMENT. WE EMPIRICALLY IDENTIFY DIFFERENT SOCIAL MEDIA ACTIVITIES IN TERMS OF SOCIAL MEDIA MANAGEMENT STRATEGIES, ACCOUNT TYPES, AND COMMUNICATIVE APPROACHES. BY ANALYZING A DATA SET OF OVER FIVE MILLION TWITTER MESSAGES, WE FIND POSITIVE EFFECTS OF SOCIAL MEDIA MANAGEMENT TOOLS, BROADCASTING ACCOUNTS, AND CONVERSATIONAL COMMUNICATION ON THE CORPORATE PUBLIC PERCEPTION.
Encouraging growth funding
(2015)
UNDER LAISSEZ-FAIRE REGULATION, REGULATORS CHOOSE NOT TO INTERFERE BECAUSE THEY SEEK TO STIMULATE INNOVATION AND PROTECT ENTERPRISES FROM THE COSTS IMPOSED BY REGULATORY COMPLIANCE. YET, EMPIRICAL EVIDENCE REGARDING THE ABILITY OF LAISSEZ-FAIRE REGULATION TO ENSURE CONSUMER PROTECTION IS LACKING. THIS ARTICLE TESTS EMPIRICALLY WHETHER THE CURRENT LAISSEZ-FAIRE REGULATION OF PRICE ADVERTISING CLAIMS ON THE MOST POPULAR REWARD-BASED CROWDFUNDING PLATFORM, KICKSTARTER, IS SUFFICIENT TO PROTECT CONSUMERS.
The uphill challenge
(2017)
Contribution of awareness information in virtual communities – the case of a financial institution
(2012)
IN DISTRIBUTED WORK ENVIRONMENTS, IT IS A CHALLENGING ISSUE FOR ORGANIZATIONS TO SUPPORT THEIR EMPLOYEES IN STAYING AWARE OF ALL IMPORTANT DEVELOPMENTS IN THEIR WORK ENVIRONMENT. ACCORDINGLY, IN THIS STUDY WE DEVELOP AND EMPICALLY TEST A CONCEPTUAL MODEL TO ENHANCE OUR UNDERSTANDING OF THE INDIVIDUALS’ CONTRIBUTION BEHAVIOR OF AWARENESS INFORMATION. WE PROVIDE GUIDANCE FOR THE DESIGN AND EVALUATION OF INFORMATION SYSTEMS TO SUPPORT THE CREATION OF SITUATION AWARENESS.
ALMOST 20% OF THE GERMAN POPULATION CURRENTLY HOLDS A CONSUMER LOAN. DESPITE ITS OBVIOUS IMPORTANCE FOR A PRIVATE HOUSEHOLD’S BALANCE SHEET, WE KNOW SURPRISINGLY LITTLE ABOUT IT. ONE PURPOSE OF THIS STUDY IS TO GIVE AN OVERVIEW OF THE GERMAN CONSUMER/INSTALLMENT LOAN MARKET. WE COMPARED FIVE WIDELY ACCEPTED DATA SOURCES AND FOUND DIFFERENCES IN THE LOAN PARTICIPATION RATE, EVEN ON AN AGGREGATED NATIONWIDE LEVEL. IN A SECOND STEP, WE TRY TO FIND REASONS FOR EXTRAORDINARY HIGH GROWTH RATES AMONG SENIORS’ DEBT PARTICIPATION RATES.
ORGANIZATIONAL MINDFULNESS (OM) SUPPORTS THE MANAGEMENT AND EMPLOYEES WORKING IN THE INCREASINGLY DYNAMIC WORK ENVIRONMENTS DRIVEN BY CLOUD COMPUTING OR MOBILE DEVICES. SPECIFICALLY, IN MINDFUL ORGANIZATIONS, SUCH AS FINANCIAL INSTITUTIONS, RELIABLE OUTCOMES ARISE FROM OM IN THE FACE OF COMPLEX INFORMATION SYSTEMS. HOWEVER, EXTANT IS RESEARCH HAS DISREGARDED THE MULTILEVEL STRUCTURE OF MINDFULNESS, ESPECIALLY THEIMPORTANCE OF MINDFUL ORGANIZING (MO) ON LOWER HIERARCHICAL LEVELS. BASED ON DATA FROM 256 USERS OF AN ORGANIZATION WIDE CLOUD-BASED DESKTOP-AS-A-SERVICE SYSTEM, WE FOUND A SIGNIFICANTLY POSITIVE INFLUENCE OF THE COMBINATION OF OM AND MO AS WELL AS DIFFERENTIAL EFFECTS FOR BOTH ON JOB PERFORMANCE.
THIS STUDY DOCUMENTS THE ROLE OF BARGAINING POWER IN THE DETERMINATION OF
MORTGAGE RATES BASED ON A UNIQUE ADMINISTRATIVE DATA SET COMPRISING 20,000
MORTGAGE LOAN CONTRACTS. WE USE VARIATION IN THE COMPETITIVE ENVIRONMENT
TO IDENTIFY THE EXTENT TO WHICH DIFFERENTIAL PRICING IS DUE TO RELATIVE BARGAINING POWER. OUR IDENTIFICATION STRATEGY SEPARATES MARKET POWER FROM OTHER SOURCES OF PRICING DIFFERENTIALS, SUCH AS CREDIT RISK, PRODUCT DIFFERENTIATION, OR OTHER COSTS. THE RESULTS INDICATE THAT BARGAINING POWER DETERMINES THE EXTENT OF PRICE DISCRIMINATION ON OBSERVABLE BORROWER CHARACTERISTICS. A REDUCTION IN LENDER BARGAINING POWER REDUCES THE DISADVANTAGE SUFFERED BY BORROWERS WHO REFINANCE THEIR LOAN AND REDUCES THE ADVANTAGE FOR THOSE WHO HAVE THEIR MAIN BANKING RELATIONSHIP AT ANOTHER BANK. SIMULTANEOUSLY, IT INCREASES THE ADVANTAGE FOR BORROWERS FALLING IN THE WEALTHY/HIGH-INCOME SEGMENT. FURTHER ANALYSES POINT TO SEARCH INCENTIVES AS AN IMPORTANT DRIVER OF THE DIRECTION OF THE EFFECT OF BARGAINING POWER.
THIS PAPER PROVIDES EMPIRICAL EVIDENCE ON THE IMPACT OF REVIEWER STATUS ONTHE OBJECTIVITY OF HIS CONTRIBUTIONS IN ONLINE COMMUNITIES. WHILE PREVIOUS RESEARCH INDICATES THAT USER-GENERATED ONLINE REVIEWS GUIDE CONSUMER DECISION MAKING, LITTLE IS KNOWN ABOUT DRIVERS OF THE ACTUAL REVIEW GENERATION PROCESS. UTILIZING A DATA SAMPLE COVERING 413,077 REVIEWS POSTED OVER 12 YEARS ON TRIPADVISOR.COM, WE FIND THAT WITH INCREASED USER STATUS, REVIEW OBJECTIVITY INCREASES. THUS, WE CONTRIBUTE TO THEORY BY GENERALIZING THE SO-CALLED "POPULARITY EFFECT" TO A MULTI-DIMENSIONAL “STATUS EFFECT”.
Bridging markets
(2016)
THE EUROPEAN POST-TRADING LANDSCAPE IS RECENTLY CHANGING FUNDAMENTALLY DUE TO THE FINANCIAL CRISIS, REGULATORY ACTIONS, AND THE STRONG LINKAGE OF GLOBAL FINANCIAL MARKETS. THE SYSTEMIC IMPORTANCE OF POST-TRADING INFRASTRUCTURES UNDERLINES THE INDUSTRY’S SIGNIFICANT DEPENDENCE ON SAFE AND EFFICIENT RISK MANAGEMENT PROCESSES. USING THE DELPHI METHODOLOGY IN A STUDY AMONG A MULTITUDE OF EXPERTS FROM DIFFERENT AREAS OF POST-TRADING, WE TRIED TO DEVELOP A JOINT AND COHERENT VIEW OF THE MOST IMPORTANT ISSUES FOR THE EUROPEAN POST-TRADING SYSTEM IN THE NEAR FUTURE.
THE PRESENT ARTICLE TRIES TO DEMYSTIFY THE LINK BETWEEN THE SUBPRIME BANKING CRISIS AND THE SUBSEQUENT FALL IN GROSS DOMESTIC PRODUCT. AN UP-TO-DATE REVIEW OF THE LITERATURE ON THE REAL CONSEQUENCES OF THE LOSS OF BANK LENDING CAPACITY IS PROVIDED, PRESENTING EVIDENCE OF A DECLINE IN NEW BANK LOANS ALONG WITH EVIDENCE OF CORPORATE REACTIONS TO THIS DECLINE. FINALLY, IT IS SHOWN HOW THE PRESENTED FACTS CAN ADD UP TO AN EVENT OF MACROECONOMIC DIMENSION.
Interview with Markus Habbel, Principal McKinsey & Company. IN THE ACTUAL CRISIS, ENTERPRISES FACE DWINDLING FINANCIAL RESOURCES AND
THE BOTTOM FALLS OUT OF A LOT OF BUSINESS. CHIEF FINANCIAL OFFICERS (CFOs) ARE IN THE EYE OF THE STORM. HOW DOES THEIR ROLE CHANGE?
The financial crisis – consequences for online banks : interview with Dr. Markus Walch, DAB bank
(2010)
NEW TECHNOLOGIES LIKE GRID COMPUTING WHICH CAN CONNECT RESOURCES AT DIVERSE LOCATIONS ARE MORE AND MORE ADOPTED FROM ORGANIZATIONS. SUCH TECHNOLOGIES CAN BOTH TRIGGER LINKAGES BETWEEN ORGANIZATIONS AND DIFFERENT DEPARTMENTS IN ONE SINGLE ORGANIZATION. WE DEVELOP A MODEL WHICH ACCOUNTS BOTH FOR INTER- AND INTRA-ORGANIZATIONAL INFLUENCE FACTORS ON THE ADOPTION PROCESS AND EMPIRICALLY IDENTIFIES THE MOST SIGNIFICANT INFLUENCE FACTORS.
ESPECIALLY IN THE FINANCiAL SERVICES INDUSTRY, FAST ACCESS TO COMMUNICATION NETWORKS AS WELL AS THE AVAILABILITY OF A HIGH-PERFORMANCE INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) INFRASTRUCTURE IS INDISPENSABLE TO ACCELERATE DIGITAL BUSINESS TRANSACTIONS BETWEEN GEOGRAPHICALLY DISPERSED ORGANIZATIONS. SINCE COLOCATION AS AN ICT SOURCING STRATEGY MAY LEAD TO INCREASED OPERATIONAL AGILITY, WE CONDUCTED AN EMPIRICAL STUDY TO INVESTIGATE THE POTENTIAL BUSINESS VALUE GENERATION.
TRADITIONALLY, THE COST OF DEBT IS SOLELY SEEN DEPENDENT ON FIRM OR DEBT CHARACTERISTICS. HOWEVER, INCREASED PRICE TRANSPARENCY AS CAN BE FOUND IN THE U.S. CORPORATE BOND MARKET HAS REDUCED CORPORATE BOND YIELDS. THE OBJECTIVE OF THIS WORK IS TO MEASURE THE SPILL-OVER EFFECT OF INCREASED PRICE TRANSPARENCY IN CORPORATE BONDS ON THE COST OF CORPORATE BORROWING OF SYNDICATED LOANS BY MAKING USE OF A NATURAL EXPERIMENT, I.E., THE INTRODUCTION OF THE TRACE SYSTEM FOR BONDS.
IN THE PAST YEARS THE CUSTOMER FEEDBACK METRIC RECOMMENDATION INTENTION HAS GAINED IMPORTANCE, ESPECIALLY DUE TO THE WIDESPREAD CONCEPT NET PROMOTER SCORE (NPS). THE NPS CONCEPT IMPLIES A POSITIVE, NON-LINEAR RELATIONSHIP BETWEEN RECOMMENDATION INTENTION AND CUSTOMER VALUE. THIS ARTICLE INVESTIGATES THE RELATIONSHIP BETWEEN RECOMMENDATION INTENTION OF INDIVIDUAL CUSTOMERS AND THEIR VALUE FOR THE FIRM. THE RESULTS SHOW THAT RECOMMENDATION INTENTION SIGNIFICANTLY INCREASES CONTRIBUTION MARGIN BUT NEITHER RETENTION NOR CUSTOMER VALUE. THE METRIC SATISFACTION HAS A SIGNIFICANT, POSITIVE IMPACT ON CUSTOMER VALUE AND CAN THUS BE USED AS A LEADING INDICATOR. THEREFORE, THE RESULTS DO NOT CONFIRM THE SUPERIORITY OF THE NPS CONCEPT FOR CUSTOMER MANAGEMENT.
Foreign exchange markets and electronic trading : interview with Carlo Kölzer, 360 Treasury Systems
(2010)
IN DISTRIBUTED WORK ENVIRONMENTS, IT IS ESSENTIAL FOR ORGANIZATIONS TO IMPLEMENT KNOWLEDGE MANAGEMENT SYSTEMS FOR ENABLING EFFICIENT KNOWLEDGE TRANSFER BETWEEN THEIR EMPLOYEES. IN A STUDY, WE THEREFORE DEVELOP AND EMPIRICALLY TEST A CONCEPTUAL MODEL TO DEEPEN OUR UNDERSTANDING ABOUT THE FACTORS WHICH INFLUENCE KNOWLEDGE TRANSFER QUALITY IN SOCIAL MEDIA ENABLED ELECTRONIC NETWORKS OF PRACTICE. ACCORDINGLY, THE FINDINGS PROVIDE GUIDANCE FOR THE DESIGN AND EVALUATION OF INFORMATION SYSTEMS THAT SUPPORT THE TRANSFER OF KNOWLEDGE BETWEEN PHYSICALLY DISTRIBUTED CO-WORKERS.
THE WAY IN WHICH PEOPLE COMMUNICATE AFFECTS THEIR RELATIONSHIPS, SOCIAL NETWORK STRUCTURES AND ULTIMATELY THE SOCIAL CAPITAL ACQUIRED THROUGH THEIR CONNECTIONS. SOCIAL CAPITAL IS A KEY FACTOR FOR THE PERFORMANCE OF INDIVIDUALS AND ORGANIZATIONS. THEREFORE, COMPANIES IN THE FINANCIAL SERVICES INDUSTRY INCREASINGLY IMPLEMENT SOCIAL MEDIA PLATFORMS TO FACILITATE COMMUNICATION AMONG EMPLOYEES AND TO LEVERAGE THE SOCIAL CAPITAL BENEFITS. ANALYZING THE INDIVIDUAL NETWORK STRUCTURES OF DIFFERENT COMMUNICATION TYPES, WE FIND THAT A MORE SELF-DISCLOSING COMMUNICATION TYPE (“MEFORMER”) BENEFITS FROM A HIGHER EFFICACY IN BUILDING SOCIAL CAPITAL COMPARED TO A PRIMARILY FACTUAL-ORIENTED COMMUNICATION TYPE (“INFORMER”).
DURING PUMP AND DUMP MARKET MANIPULATIONS, DECEIVERS ADVERTISE STOCKS BY PUBLISHING VERY POSITIVE NEWS TO PROFIT FROM AN INCREASED PRICE LEVEL. MARKET SURVEILLANCE AUTHORITIES HAVE TAKEN SEVERAL COUNTERMEASURES AGAINST SUCH FRAUDULENT STOCK RECOMMENDATIONS, BUT SIMULTANEOUSLY, DECEIVERS HAVE CONSTANTLY UPDATED THEIR TACTICS. THE RESEARCH INVESTIGATES WHETHER SUCH MANIPULATIONS STILL POSE A RISK FOR INVESTORS AND IF YES, WHICH CHARACTERISTICS DRIVE THEIR SUCCESS.
SOCIAL NETWORKS ARE COMMONLY USED IN PRIVATE AND BUSINESS LIFE. DIFFERENT STUDIES OUTLINE THAT THIS TREND WILL INCREASE IN THE NEARER FUTURE. IN ORDER TO UNDERSTAND THE BEHAVIORAL INTENTION TO PARTICIPATE IN SOCIAL NETWORKS OF NEXT GENERATION EMPLOYEES, WE EXTENDED THE WELL-ESTABLISHED THEORY OF PLANNED BEHAVIOUR TO HABIT AND INFORMATION OVERLOAD. USING SURVEY DATA FROM 262 PARTICIPANTS, WE FOUND THAT THE OVERLOAD OF INFORMATION PLAYS AN IMPORTANT ROLE TO PARTICIPATE IN SOCIAL NETWORKS, BESIDES THE HABIT TO USE SUCH NETWORKS.
Customer equity reporting
(2014)
WHARTON SCHOOL OF BUSINESS AT UNIVERSITY OF PHILADELPHIA HAS JUSTLAUNCHED AN 8-WEEK ONLINE PROGRAM “STRATEGIC VALUE OF CUSTOMER RELATIONSHIPS – ONLINE” TAUGHT BY MARKETING PROFESSOR AND AUTHOR PETER FADER. HE INVITED PROFESSOR SKIERA, DIRECTOR OF THE E-FINANCE LAB, TO PHILADELPHIA TO LEARN ABOUT HIS THOUGHTS ON “CUSTOMER EQUITY REPORTING”. THIS ARTICLE SUMMARIZES SOME OF PROFESSOR FADER’S QUESTIONS AND PROFESSOR SKIERA’S REPLIES.
SOCIAL MEDIA PLATFORMS PRESENT UNIQUE POSSIBILITIES FOR COMPANIES TO INTERACT WITH THEIR CUSTOMERS AND TAKE UP A KEY ROLE IN BUILDING RELATIONSHIPS. HOWEVER, LITTLE IS KNOWN CONCERNING THE FINANCIAL RETURN ON INVESTMENT FROM SOCIAL MEDIA ENGAGEMENT AND SPECIFIC STRATEGIES TO LEVERAGE IT. THE ANALYSIS OF OVER 1.5 MILLION TWEETS REVOLVING AROUND TEN CAR MANUFACTURERS SUGGESTS THAT COMPANIES CAN INCREASE THEIR SALES VOLUME THROUGH GREATER RELATIONSHIP INVESTMENT AND BY ADOPTING A SOCIAL MEDIA STRATEGY THAT PROMOTES THE USERS’ RELATIONSHIP SATISFACTION.
TO INCREASE THE INFORMATION SECURITY AWARENESS AMONG THEIR WORKFORCE AND TO ACHIEVE SECURE INFORMATION SYSTEMS, DECISION-MAKERS EMPLOY MEASURES OF INFORMATION SECURITY, SUCH AS SECURITY POLICIES OR ASSOCIATED TRAINING AND EDUCATIONAL PROGRAMS. HOWEVER, THESE MEASURES MIGHT STRESS EMPLOYEES. THIS IS TRUE IF, FOR INSTANCE, INFORMATION SECURITY MEASURES ARE PERCEIVED AS DIFFICULT TO UNDERSTAND, AS AN INVASION OF PRIVACY, OR IF THEY GIVE RISE TO CONFLICTS OF INTEREST. CONSEQUENTLY, A MULTI-FACETED PERSPECTIVE ON EMPLOYEES' STRUGGLE WITH INFORMATION SECURITY IS DISCUSSED.
PRO-CYCLICALITY OF COLLATERAL HAIRCUTS AND MARGINS HAS BECOME A WIDELY PROCLAIMED BEHAVIOUR BUT EMPIRICAL EVIDENCE ON THIS TOPIC IS QUITE SPARSE AND THE DISCUSSIONS ARE PRIMARILY DRIVEN BY INSIGHTS DERIVED FROM THEORETICAL MODELS. BASED ON A UNIQUE DATA SET, WE CONSTRUCT A MEASURE OF SYSTEMIC ILLIQUIDITY OF BOND COLLATERALS AND APPLY BUBBLE DETECTION TECHNIQUES TO IDENTIFY IRRATIONAL BEHAVIOUR AND PRO-CYCLICAL TENDENCIES. FINALLY, WE PROPOSE A QUANTITATIVE TRIGGER AND DESIGN FOR MACROPRUDENTIAL HAIRCUT ADD-ONS.
Interview with Piebe Teeboom, Secretary General FIA European Principal Traders Association
TechQuartier to boost the start-up scene in Frankfurt am Main : interview with Sebastian Schäfer
(2017)
Interview with Sebastian Schäfer, Managing Director TechQuartier, Frankfurt
Interview with Hauke Stars, Member of the Executive Board Deutsche Börse AG
THE PRICE-TO-EARNINGS (P/E) RATIO IS ONE OF THE MOST IMPORTANT METRICS FOR VALUING FIRMS. UNFORTUNATELY, INTERPRETATIONS OF HIGH-GROWTH FIRMS’ P/E RATIOS CAN BE CHALLENGING, BECAUSE THEY FREQUENTLY EXHIBIT EITHER EXTREMELY HIGH OR NEGATIVE VALUES. WE SHOW THAT THE USE OF CUSTOMER METRICS ALLOWS FOR BETTER INTERPRETING THESE P/E RATIOS, THAT IMPROVEMENTS IN CUSTOMER METRICS HAVE NON-INTUITIVE AND SURPRISING EFFECTS ON THE P/E RATIO, AND THAT OUR NEW MODEL BETTER PREDICTS FUTURE P/E RATIOS THAN EXISTING MODELS.
DESPITE AMPLE EVIDENCE THAT CUSTOMERS EXHIBIT HIGHER DISCOUNT RATES THAN FIRMS, IT IS NOT CLEAR HOW DIFFERENCES IN DISCOUNT RATES AFFECT OPTIMAL PRICES, PROFITS, AND WELFARE OF COMPLEMENTARY PRODUCTS (WHICH COULD BE GOODS OR SERVICES). WE SHOW FOR COMPLEMENTARY PROUCTS THAT HIGHER DISCOUNT RATES OF CUSTOMERS DO NOT INCREASE PROFIT OR CONSUMER SURPLUS. FIRMS, INCLUDING BANKS, WOULD BE ADVISED TO SEEK TO REDUCE EXCESSIVE DISCOUNT RATES AMONG CONSUMERS.
UNDERSTANDING THE COMPETITIVE ENVIRONMENT FOR DIGITAL CONSUMER ATTENTION IS CRUCIAL FOR BANKS’ STRATEGIC ACTIONS. THEREFORE, BANKS NEED TO DETERMINE THE MARKET THEY COMPETE FOR, THEIR SUCCESS ON THIS MARKET, AND WHO THEY COMPETE WITH FOR CONSUMER ATTENTION. USING ORGANIC SEARCH ENGINE DATA, WE PROPOSE A NEW APPROACH TO (I) DEFINE THE DIGITAL MARKET, (II) IDENTIFY THE PLAYERS IN THE MARKET, (III) ESTIMATE THE DISTRIBUTION OF DIGITAL CONSUMER ATTENTION ACROSS BANKS, AND (IV) UNCOVER THE COMPETITIVE MARKET STRUCTURE FOR THE ONLINE RETAIL BANKING MARKET IN GERMANY.
STUDIES HAVE FOCUSED ON INNOVATIONS IN VARIOUS CONTEXTS BUT LARGELY EXCLUDED FINANCIAL INNOVATIONS, DESPITE THEIR NOTABLE IMPORTANCE. THIS STUDY ANALYZES THE TYPES OF FINANCIAL INNOVATIONS BY MAJOR BANKS AND THEIR PAYOFFS. THE RESULTS INDICATE THAT SECURITY AND CREDIT INSTRUMENTS CONSTITUTE THE MOST COMMON FINANCIAL INNOVATIONS. THE AVERAGE RETURNS TO A FINANCIAL INNOVATION ARE $146 MILLION. IN ADDITION, RADICALNESS AND FINANCIAL RISKINESS INCREASE THE RETURNS, WHEREAS COMPLEXITY DECREASES THEM.
RECENTLY, PASSIVE ETFS AND INDEX FUNDS HAVE BECOME POPULAR AMONG INDIVIDUAL INVESTORS. IN OUR STUDY, WE INVESTIGATE WHETHER INDIVIDUAL INVESTORS BENEFIT FROM USING THEM. WITH DATA FROM ONE OF THE LARGEST BROKERAGES IN GERMANY, WE FIND THAT INDIVIDUAL INVESTORS WORSEN THEIR PORTFOLIO PERFORMANCE AFTER USING THESE PRODUCTS IN COMPARISON TO NON-USERS. SINCE THESE SECURITIES MAKE MARKET TIMING EASIER, FURTHER ANALYSIS REVEALS THAT THE DECREASE IN USERS’ PORTFOLIO PERFORMANCE IS PRIMARILY DUE TO BAD MARKET TIMING.
THIS STUDY INVESTIGATES WHAT HAPPENS WHEN RETAIL CUSTOMERS ARE OFFERED FREE AND UNBIASED ADVICE. USING A LARGE FIELD EXPERIMENT IT SHOWS THAT THOSE WHO ACCEPT THE OFFER (5%) ARE MORE LIKELY TO BE MALE, OLDER, WEALTHIER, MORE EXPERIENCED AND MORE FINANCIALLY SOPHISTICATED. HOWEVER, EVEN THOUGH THE ADVICE WOULD HAVE HELPED, IT ACTUALLY LARGELY FAILED TO HELP BECAUSE THE CUSTOMERS DID NOT LISTEN TO IT. OVERALL, OUR RESULTS SUGGEST THAT THE MERE AVAILABILITY OF UNBIASED FINANCIAL ADVICE IS A NECESSARY BUT NOT SUFFICIENT CONDITION FOR BENEFITING RETAIL CUSTOMERS.
WE DECOMPOSE INDIVIDUAL INVESTORS’ PORTFOLIO RETURNS INTO PASSIVE BENCHMARK RETURNS, ACTIVE SECURITY SELECTION RETURNS, AND ACTIVE MARKET TIMING RETURNS. FOR THE AVERAGE INVESTOR IN OUR SAMPLE, PASSIVE BENCHMARK RETURNS EXPLAIN SOME 40% OF VARIATION IN LONGITUDINAL PORTFOLIO RETURNS, SECURITY SELECTION EXPLAINS AN ADDITIONAL 50%, AND MARKET TIMING PLAYS ONLY A MINOR ROLE. THIS STANDS IN STARK CONTRAST TO EARLIER RESULTS ON INSTITUTIONAL INVESTORS WHERE PASSIVE BENCHMARK RETURNS (REFLECTING DIFFERENT ASSET ALLOCATION STRATEGIES) EXPLAIN OVER 90%. THE PREDOMINANCE OF SECURITY SELECTION COMES AT A COST FOR INDIVIDUAL INVESTORS: INVESTORS FROM THE HIGHEST QUINTILE IN TERMS OF SECURITY SELECTION ACTIVITY UNDERPERFORM THEIR PEERS FROM THE LOWEST QUINTILE BY MORE THAN 10 PERCENTAGE POINTS PER YEAR. TRANSACTION COSTS EXPLAIN ONLY PART OF THIS UNDERPERFORMANCE. THE LESS INVESTORS DIVERSIFY, THE WORSE THEY DO.
WE STUDY WHETHER PRIVATE EQUITY (PE) FIRMS HAVE A POSITIVE IMPACT ON THE FINANCIAL PERFORMANCE OF THEIR GERMAN PORTFOLIO COMPANIES BEFORE AND AFTER THE IPO. OUR EMPIRICAL ANALYSIS IS BASED ON A UNIQUE AND LARGE DATASET OF ALL IPOS IN GERMANY BETWEEN 2000 AND 2007. WE FIND THAT PE FIRMS SELECT COMPANIES WITH BELOW AVERAGE PERFORMANCE AND THEN IMPROVE PERFORMANCE SUBSTANTIALLY UNTIL THE IPO DATE AND IN MANY CASES ALSO THEREAFTER. THIS IMPLIES THAT PE FIRMS FILL A VOID ALSO IN GERMAN FINANCIAL MARKETS AND THAT THEY WILL ALSO PLAY A FUTURE ROLE IN FINANCING GERMAN ENTERPRISES.
INDIVIDUAL INVESTORS ARE REPEATEDLY FOUND TO UNDERPERFORM RELATIVE TO A MARKET INDEX. BESIDES EXCESSIVE TRADING, LITTLE IS KNOWN WHEN RETAIL INVESTORS COLLECTIVELY LOSE. THIS ARTICLE SHOWS THAT TRADING IN SHORT-SELLING CONSTRAINED, VOLATILE STOCKS AROUND EARNINGS ANNOUNCEMENTS IS COSTLY TO INDIVIDUAL INVESTORS. THE EFFECT IS PARTICULARLY PRONOUNCED FOR LESS SOPHISTICATED INVESTORS.