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We raise some critical points against a naïve interpretation of “green finance” products and strategies. These critical insights are the background against which we take a closer look at instruments and policies that might allow green finance to become more impactful. In particular, we focus on the role of a taxonomy and investor activism. We also describe the interaction of government policies with green finance practice – an aspect, which has been mostly neglected in policy debates but needs to be taken into account. Finally, the special case of green government bonds is discussed.

The sustained low-interest rate environment raises several economic challenges. These challenges as well as the underlying causes are subject to an intense economic debate. This article, traces the scientific debate by laying out the theoretical and empirical arguments. As not only nominal, but also real rates have decreased in most developed economies over a long period of time, monetary policy is unlikely to be the major driver of the development. In contrast, theories that explain the decline in interest rates with structural changes in the demand and supply of capital are consistent with the empirical evidence and offer a more convincing explanation. Beyond an analysis of the roots of the decrease, we discuss potential economic consequences of persistently low interest rates. In particular, we discuss evidence of how the transmission channels of monetary policy, financial intermediaries, non-financial companies as well households are affected by the low-interest rate environment. Finally, we provide policy recommendations.

Manipulation of hard information has been at the center of a wave of investigations into fraudulent bank behavior, such as mis-selling of mortgages and rigging of London Interbank Offered Rate and Foreign Exchange rates. Despite these prominent cases, little is known as to why employees manipulate hard information. Using almost a quarter million retail loan applications, we show that loan officers who face volume-based incentives significantly manipulate ratings even in settings where ratings are computed using hard information only. Manipulation is widespread across loan officers, with low-performing loan officers manipulating more toward the end of the year. These incentives have a first-order effect on bank profitability, reducing return on equity by 1.5 percentage points. We conclude that reliance on hard information does not overcome loan officer agency problems, and it is important for banks and regulators to take manipulation of hard information into account when using hard information for risk assessment and regulation.

We study the impact of exogenous funding shocks to German savings banks during the U.S. subprime mortgage crisis on the labor decisions of 30,000 + private and public firms in Germany. We find that firms with credit relationships with affected banks experience a significant decline in labor demand relative to firms with credit relationships with healthy banks, manifested in a simultaneous reduction in firm-level employment and average wages. The employment effect is more pronounced in larger firms, while the wage effect is stronger in smaller firms. Both employment and wages go back to pre-shock levels three years after the shock.

In recent years, the German banking sector has overcome major challenges such as the global financial crisis and the European debt crisis. This paper analyzes a recent development as a particular determinant of the future outlook for the German banking sector. Interest rates are at historically low levels and may remain at these levels for a considerable period of time. Such levels pose a specific challenge to banks which are heavily dependent on interest income, as is the case for most German banks. We consider different interest rate scenarios and analyze the extent to which they cause a further narrowing of the interest rate margin. Our results indicate that a projected decline in this margin will result in no more than 20% of German banks earning a cost of capital of 8% by the end of this decade. However, we show that this decline is alleviated by the fact that German banks can apply a special feature of German accounting standards by using hidden and open reserves. We discuss how these income smoothing tools will provide a cushion that supports short‐ and medium‐term adjustments through a buffer effect. (JEL G21, G28)

Using a unique dataset of more than 1 million loans made by 296 German banks, we evaluate the impact of many aspects of customer–bank relationships on loan default rates. Our research suggests a practical solution to reducing loan defaults for new customers: Have the customer open a simple transactions account – savings or checking account. Observe for some time and then decide whether to make a loan. Loans made under this model have lower default, as banks can use historical data about their borrowers to establish a baseline against which new client-related information can be evaluated. Banks assemble this historical information through relationships of different forms. We define relationships in many different ways to capture non-credit relationships, transaction accounts, as well as the depth and intensity of relationships, and find each of these can provide information that helps reduce default – even establishing a simple savings or checking account and observing the activity prior to loan granting can help reduce loan defaults. Our results show that banks with relationship-specific information act differently compared with banks that do not have this information both in screening and subsequent monitoring borrowers which helps reduce loan defaults.

This paper examines the impact of takeover law enforcement on corporate acquisitions. We use the European Takeover Directive as a natural experiment, which harmonizes takeover law across countries, while leaving its enforcement to the discretion of individual countries. We exploit this heterogeneity in enforcement quality across countries in a difference-in-differences-in-differences model, while employing an overall inductive research approach, following Karpoff and Whittry’s (2018) recommendation. We find that acquirer returns increase in countries with improvements in takeover law, driven by better target selection and lower cost of financing. The increase in acquirer returns is lower in weak enforcement jurisdictions, which we identify by developing a novel Takeover Law Enforcement Index (TLEI). The findings show that takeover law can mitigate agency conflicts, but its true value depends on its enforcement. Our results are robust to a number of robustness tests.

This paper examines the impact of takeover law enforcement on corporate acquisitions. We use the European Takeover Directive as a natural experiment, which harmonizes takeover law across countries, while leaving its enforcement to the discretion of individual countries. We exploit this heterogeneity in enforcement quality across countries in a difference-in-differences-in-differences model, while employing an overall inductive research approach, following Karpoff and Whittry's (2018) recommendation. We find that acquirer returns increase in countries with improvements in takeover law, driven by better target selection and lower cost of financing. The increase in acquirer returns is lower in weak enforcement jurisdictions, which we identify by developing a novel Takeover Law Enforcement Index (TLEI). The findings show that takeover law can mitigate agency conflicts, but its true value depends on its enforcement. Our results are strongly robust to alternative model specifications.

This article analyzes whether political connections of the board of directors of publicly traded companies in the USA affect the allocation of government procurement contracts. It focuses on the change in control of both House and Senate following the 1994 election and finds that companies with boards connected to the winning (losing) party experience a significant and large increase (decrease) in procurement contracts after the election. The results remain significant after controlling for industry classifications as well as for several other company characteristics. The findings highlight one of the main avenues through which corporate political connections add value to US companies. Copyright 2013, Oxford University Press.

Das Ziel der Einheit von Eigentum und Haftung, dem bei der Einführung des Euro unter anderem durch das No-Bailout-Prinzip Rechnung getragen wurde, hat sich während der Finanzkrise nicht erfüllt. Viel zu häufig ist Bail-out an die Stelle von Bail-in getreten und hat damit substantielle Lasten für Steuerzahler geschaffen. Die Überwindung der engen Verflechtung zwischen Staaten und Banken, aber insbesondere der engen Verflechtung von Banken untereinander bleibt eine große Herausforderung auf dem Weg zu einem nachhaltig funktionierenden Euroraum. Die Schaffung stabiler Finanzmärkte ist damit die wesentliche Grundvoraussetzung für die Herstellung der Einheit von Eigentum und Haftung. The goal of unifying ownership and liability was addressed by the no-bailout principle as part of the introduction of the euro. Yet it was not achieved during the financial crisis. All too often, bail-ins were replaced by bailouts, creating substantial burdens on taxpayers. Overcoming the close interdependence between states and banks, but particularly the tight interrelationships between banks themselves, remains a major challenge on the way to creating a sustainable, functioning Eurozone. As a result, creating stable financial markets is the fundamental prerequisite for unifying ownership and liability.

We analyze the effect of initial public offerings (IPOs) on industry competitors and provide evidence that companies experience negative stock price reactions to com pleted IPOs in their industry and positive stock price reactions to their withdrawal. Following a successful IPO in their industry, they show significant deterioration in their operating performance. These results are consistent with the existence of IPO related competitive advantages through the loosening of financial constraints, finan cial intermediary certification, and the presence of knowledge capital. These aspects of competitiveness are significant in explaining the cross-section of underperformance as well as survival probabilities for competing firms. An extensive literature analyzes the performance of companies around their initial public offerings (IPOs). This literature focuses on returns on the first day of trading, as well as on returns and operating performance for the 5-year period after the IPO. For example, Ibbotson and Jaffe (1975) document a positive initial return for newly issued companies, while Ritter (1991) analyzes the long run stock price performance of IPOs and Jain and Kini (1994) consider firms' post-IPO operating performance. Our article adds a new dimension to this literature by considering not only the stock market and operating performance of the issuing company, but also the impact of the IPO on the performance of industry competitors. The competitive effects of IPOs have important implications for various agents including investors, industry competitors, and issuing firms. Issuing companies comprise a relatively small portion of portfolio value; in this arti cle's sample, for instance, existing and publicly traded firms comprise 97.5% of the total post-IPO market capitalization of industries in which IPOs occur, while IPO firms comprise only 2.5%. It is therefore important for investors to know how an IPO affects the operating and stock market performance of

This paper uses proprietary data on European IPOs with detailed information on the demand at different points of time and allocation for institutional and retail investors. The nature of the data allows us to analyze the reason of why institutional investors as a group get more allocations of underpriced issues than retail investors. By explicitly examining institutional and retail demand for different kinds of stocks, we find that this is due to institutional investors' superior ability to detect underpriced stocks rather than the underwriter's preferential treatment. At the same time, the subset of domestic institutional investors supports the underwriter in issues with weak demand and receives in turn favorable allocations in underpriced issues.

This article explores whether political connections are important in the United States. The article uses an original hand-collected data set on the political connections of board members of S&P 500 companies to sort companies into those connected to the Republican Party and those connected to the Democratic Party. The analysis shows a positive abnormal stock return following the announcement of the nomination of a politically connected individual to the board. This article also analyzes the stock-price response to the Republican win of the 2000 presidential election and finds that companies connected to the Republican Party increase in value, and companies connected to the Democratic Party decrease in value. The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.

We document a general pattern in the euro area overnight interbank rate (EONIA) and analyze how German banks compared to other EMU banks respond to these predictable changes in the price for reserve holdings. At the beginning of the maintenance period, when the EONIA is typically above average, we observe that German banks hold substantially less reserves than their daily average required reserves. Thus in contrast to other EMU banks, German banks back load the fulfillment of their reserve requirements over the reserve maintenance period and thereby benefit from the general pattern in the EONIA. Looking at the disaggregate data we find than this is particularly the case for the Landesbanks. We argue that the end of the calender month effect in the EONIA may be driven by a temporary shortage of liquidity, relative to reserve requirements, at the beginning of the maintenance period (which coincides with the end of the calendar month).

Central banks are under increased scrutiny because of the rapid growth in, and composition of, their balance sheets. Therefore, understanding the processes that shape these balance sheets and their consequences is crucial. We contribute by studying an extensive dataset of banks’ liquidity uptake and pledged collateral in central bank repos. We document systemic arbitrage whereby banks funnel credit risk and low-quality collateral to the central bank. Weaker banks use lower quality collateral to demand disproportionately larger amounts of central bank money (liquidity). This holds both before and after the financial crisis and may contribute to financial fragility and fragmentation.

This paper examines the relationship between legal shareholder rights and acquirer returns. Europe is an ideal context to explore this link because various institutional differences make the European Takeover Directive a suitable focus for a natural experiment. We find that an improvement of legal shareholder rights entails an increase in acquirer returns, supporting the hypothesis that strong shareholder rights constrain the discretion of corporate insiders, leading to better investment decisions. However, this value creation is partly consumed by the costs of the reform. The gains from improving legal shareholder rights are decreasing in the relative disruption of prevailing governance practices.

The landmark decision by the U.S. Supreme Court on Citizens United v. Federal Election Commission asserts for the first time that corporations benefit from First Amendment protection regarding freedom of speech in the form of independent political expenditures, thus creating a new avenue for political activism. This paper studies how corporations adjusted their political activism in response to this ruling. The paper presents evidence consistent with the hypothesis that institutional investors, in particular public pension funds, have a preference for not using the new avenue for political activism, a preference not shared by other investors.

Die offensichtliche Krise im Euroraum befindet sich nun in ihrem funften Jahr. Wenn man die weltweite Finanzkrise betrachtet, gehen wir sogar bereits ins achte Jahr. Diese uber einen solch langen Zeitraum anhaltende und in Form und Intensitat variierende Finanzkrise hat nicht nur zu massiven Erschutterungen innerhalb des Systems gefuhrt, sondern auch grundlegende Kritik an unserem marktwirtschaftlichen Wirtschaftssystem hervorgerufen. Dabei geht es vor allem um den haufig vorgebrachten Vorwurf, dass die Gewinne von Unternehmen und Banken privatisiert, die Verluste – bei Banken insbesondere im Fall vermeintlicher systemischer Relevanz – jedoch sozialisiert wurden.

Der wissenschaftliche Beirat beim Bundesfinanzministerium hat jüngst in einer Stellungnahme darauf aufmerksam gemacht, dass die gegenwärtige Finanzordnung in der Europäischen Währungsunion dem Staat in seiner Eigenschaft als Schuldner besondere Privilegien einräumt. Die Autoren geben einen kurzen Überblick über diese Privilegien, diskutieren die daraus resultierenden Probleme und zeigen die Notwendigkeit ihres Abbaus auf. Even though governments usually enjoy favourable borrowing conditions, the current financial system in Europe grants special privileges to government debt. This involves capital requirements in banking regulation, ECB policies, intergovernmental guarantees, etc. The paper gives a short outline of the privileges, discusses their justifi cation and highlights problems.

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of guarantees for German Landesbanken which results in lower credit ratings, higher funding costs, and a loss in franchise value. This removal was announced in 2001, but Landesbanken were allowed to issue guaranteed bonds until 2005. We find that Landesbanken lend to riskier borrowers after 2001. This effect is most pronounced for Landesbanken with the highest expected decrease in franchise value. Landesbanken also significantly increased their off-balance sheet exposure to the global ABCP market. Our results provide implications for the debate on how to remove guarantees.

Poor loan quality is often attributed to loan officers exercising poor judgment. A potential solution is to base loans on hard information alone. However, we find other consequences of bypassing discretion stemming from loan officer incentives and limits of hard information verifiability. Using unique data where loans are based on hard information, and loan officers are volume-incentivized, we find loan officers increasingly use multiple trials to move loans over the cut-off, both in a regression-discontinuity design and when the cut-off changes. Additional trials positively predict default suggesting strategic manipulation of information even when loans are based on hard information alone.

There is increasing reliance on quantitative complex models, such as internal ratings based (IRB) models for bank regulation, with much resources being spent on model validation exercises. We argue that a significant cost of IRB models that is not well understood or monitored is the change in loan officer incentives down the line. Using proprietary data on almost a quarter million loan applications, we show loan officer incentives significantly skew ratings even if the quantitative model is correct and there is no subjectivity in the system. These incentive effects have a first order effect on bank profitability. Incentives influence the hard information reported by loan officers and thus change the link between hard information and default probabilities in a way not captured by regular model validation exercises. Banks and regulators need to take these effects into account when using internal ratings for risk assessment and regulation.

This paper analyzes how banks react to the financial crisis and a deteriorating solvency and liquidity condition in their investment decisions and the composition of their financial assets. We use a novel dataset, which comprises all security investments by all German banks on a security-by-security basis between 2006 and 2011, and analyze whether and how banks use sales and purchases of these securities as the most direct and immediate way to change their overall asset structure. We find that banks substantially change their investment strategies with the beginning of the financial crisis. In particular, they shift their investments towards securities that are eligible as collateral in central bank credit operations and towards domestic securities. These patterns hold in particular for less healthy, lowly rated and large banks. Furthermore, banks with substantial exposure to troubled assets as for example Greek government bonds are particularly active in this perspective. Our results highlight the substantial changes in bank portfolios following the financial crisis, which constitute a major part of their assets, and have important implications for the current regulatory as well as policy debate on banks’ investment decisions.

In der Debatte über die Zukunft der Eurozone wird auch das Konzept der Bankenunion diskutiert. Hans-Peter Burghof, Universität Hohenheim, sieht unter den gegenwärtigen Bedingungen die Gefahr einer europäischen Bankenunion, in der das Vermögen einiger Länder des Währungsraumes ohne wirksame Kontrolle in den Herrschaftsbereich einiger anderer Länder in Europa verschoben wird. Nach Ansicht von Bernhard Speyer, Deutsche Bank Research, wird ohne die Verwirklichung der Bankenunion weder der Finanzbinnenmarkt noch die Stabilität der Währungsunion zu retten sein. Allerdings sind hierfür grundlegende Vorarbeiten und eine Änderung des Vertrags notwendig. Eine Bankenunion sei weder Ersatz für Integrationsschritte an anderer Stelle noch sei sie geeignet als rasche Lösung für akute Probleme in den Bankensystemen einzelner Staaten. Für Michael Kemmer, Bundesverband deutscher Banken, kommt es wesentlich auf die richtige Schrittfolge auf dem Weg zu einer Bankenunion an. Wer als ersten Schritt eine europäische Einlagensicherung und einen europäischen Abwicklungs- bzw. Restrukturierungsfonds fordere, faktisch eine Vergemeinschaftung von Risiken, werde eher über kurz als über lang ins Straucheln geraten. Jörg Rocholl, European School of Management and Technology, Berlin, sieht derzeit die Voraussetzungen für eine Bankenunion nur sehr eingeschränkt gegeben. Deutschland solle daher eine übereilte Einführung einer Bankenunion ablehnen. Es ließe sich weder wirtschaftlich noch politisch vermitteln, dass die in bestimmten Ländern entstandenen Risiken, ohne die Möglichkeiten entsprechender Kontrollvorrichtungen, zulasten aller vergemeinschaftet werden. Für Georg Fahrenschon, Deutscher Sparkassen- und Giroverband, ist eine einheitliche europäische Einlagensicherung, die nichts weiter ist, als eine gigantische Umverteilung zu Lasten der deutschen Sparer, keine Antwort auf Krisen in anderen Teilen Europas. Nach Meinung von Jörg Asmussen, Europäische Zentralbank, hat die Krise verdeutlicht, wie

This paper examines the broader effects of the US financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany using a unique data set of German savings banks during the period 2006 through 2008 for which we have the universe of loan applications and loans granted. Our experimental setting allows us to distinguish between savings banks affected by the US financial crisis through their holdings in Landesbanken with substantial subprime exposure and unaffected savings banks. The data enable us to distinguish between demand and supply side effects of bank lending and find that the US financial crisis induced a contraction in the supply of retail lending in Germany. While demand for loans goes down, it is not substantially different for the affected and nonaffected banks. More important, we find evidence of a significant supply side effect in that the affected banks reject substantially more loan applications than nonaffected banks. This result is particularly strong for smaller and more liquidity-constrained banks as well as for mortgage as compared with consumer loans. We also find that bank-depositor relationships help mitigate these supply side effects.

This paper analyzes the importance of discretion in bank lending decisions. We use a unique dataset of more than 1 million loan applications to customers of German savings banks and can observe accept and reject decisions as well as loan performance. We document that discretion is widespread and economically significant, in particular for customers with an existing relationship with their bank and medium credit quality. This discretion is based on soft information mainly for customers with no credit history (e.g. younger customers) and on hard information mainly for customers with a given credit history (e.g. with significant use of their credit lines). Finally, we find no evidence that loans approved based on the loan officer’s discretion perform any differently than other loans. These results help us in better understanding the loan making process and thus to shed light on an important, open question of interest to academicians, banks, consumers and regulators.

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of guarantees for German Landesbanken which results in lower credit ratings, higher funding costs, and a loss in franchise value. This removal was announced in 2001, but Landesbanken were allowed to issue guaranteed bonds until 2005. We find that Landesbanken lend to riskier borrowers after 2001. This effect is most pronounced for Landesbanken with the highest expected decrease in franchise value. Landesbanken also significantly increased their off-balance sheet exposure to the global ABCP market. Our results provide implications for the debate on how to remove guarantees.

In this paper, Benedicta Marzinotto and Jörg Rocholl focus on the tightening of credit conditions for banking rules (Basel III), particularly the estimated macroeconomic costs range, monetary policy and the aggregate costs of the measures. The authors report that the monetary policy response to these changes is not likely to be accommodating and that the aggregate costs of the measures will be differently distributed across countries depending on a variety of issues.

Using a unique dataset of more than 1 million loans made by 296 German banks, we evaluate the impact of many aspects of customer–bank relationships on loan default rates. Banks need historical data about their borrowers to establish a baseline against which new client-related information can be evaluated and assemble this historical information through relationships of different forms (transaction accounts, savings accounts, prior loans), scope (credit and debit cards, credit lines), and depth (relationship length, utilization of credit line, money invested in savings account). We find that banks with relationship-specific information act differently compared with banks that do not have this information both in screening and monitoring borrowers which eventually reduces loan defaults.

This paper analyses the substantially growing markets for crowdfunding, in which retail investors lend to borrowers without financial intermediaries. Critics suggest these markets allow sophisticated investors to take advantage of unsophisticated investors. The growth and viability of these markets critically depends on the underlying incentives. We provide evidence of perverse incentives in crowdfunding that are not fully recognized by the market. In particular we look at group leader bids in the presence of origination fees and find that these bids are (wrongly) perceived as a signal of good loan quality, resulting in lower interest rates. Yet these loans actually have higher default rates. These adverse incentives are overcome only with sufficient skin in the game and when there are no origination fees. The results provide important implications for crowdfunding, its structure and regulation.

This paper provides evidence that a country’s pension system is an important determinant for the development of its capital markets. Employing a unique event list of 87 pension funding reforms in 57 countries between 1976 and 2007, we find that pension funding reforms lead to larger stock and corporate bond markets relative to the time before the reforms and relative to other countries without such reforms. This effect is particularly driven by an increase in the post-reform primary market issuing activity and cannot be explained by a simultaneous political move to more market-oriented reforms in these countries in general. We find that the effect is particularly significant in emerging markets with a priori less developed capital markets. Further evidence from a cross-sectional analysis suggests that the degree of pension funding is an important determinant of the cross-country variation in capital market development. It remains robust even after controlling for other important determinants of capital market development such as legal origin and trade openness.

We identify frictions in the market for liquidity as well as bank-specific and market-wide factors that affect the prices that banks pay for liquidity, captured here by borrowing rates in repos with the central bank and benchmarked by the overnight index swap. We have price data at the individual bank level and, unique to this paper, data on individual banks’ reserve requirements and actual reserve holdings, thus allowing us to gauge the extent to which a bank is short or long liquidity. We find that the price a bank pays for liquidity depends on the liquidity positions of other banks, as well as its own. There is evidence that liquidity squeezes occasionally occur and short banks pay more the larger is the potential for a squeeze. The price paid for liquidity is decreasing in bank size and small banks are more adversely affected by an increased potential for a squeeze. Healthier banks pay less, but contrary to what one might expect, banks in formal liquidity networks do not.

This paper examines the broader effects of the U.S. financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany taking advantage of a unique dataset of German savings banks over the period 2006-2008 for which we have the universe of loan applications and loans granted in this time period. Our experimental setting allows us to distinguish between those savings banks affected by the U.S. financial crisis, through their holdings in Landesbanken with substantial subprime exposure, and unaffected savings banks. We are further able to distinguish between demand and supply side effects of bank lending and find that the U.S. financial crisis induced a contraction in the supply of retail lending in Germany. While demand for loans goes down it is not substantially different for the affected and non-affected banks. We find evidence that the affected banks reject substantially more loan applications than non-affected banks. This effect is particularly strong for smaller and more liquidity-constrained banks as well as for mortgage as compared to consumer loans. We also find that bank-depositor relationships help mitigate these supply side effects.

We analyze why companies that receive private equity investments outperform their rivals. We show that rivals experience a decrease in their stock prices and their operating performance around private equity (PE) investments in their industry. Furthermore, we show that the withdrawal of a previously announced PE investment leads to the exact opposite outcome: Competitors’ stock prices increase in this case. We demonstrate that firms without private equity investments experience a relative decrease in performance, and we identify the underlying sources for the decrease in competitiveness by analyzing the cross-sectional differences in competitors’ performance. We find that the level of specialization, corporate governance, technological innovation, managerial incentives, and efficiency are all related to performance differences among competitors at the time of the PE investment. Taken together, our findings support the hypothesis that performance differences are driven, at least in part, by the advantages by PE investors.

Hendrik Hering, Wirtschaftsminister von Rheinland-Pfalz, sieht im »Fall« Opel keinen Einzelfall, Tag für Tag fände genau eine solche Unterstützung bei zahlreichen kleinen und mittelständischen Unternehmen statt. Es sei richtig gewesen, Opel zu helfen. Nun sei GM an der Reihe. Der Staat habe eine Brücke gebaut, die es ermögliche, industrielle Kompetenzen am Standort Deutschland zu erhalten, und zwar nicht nur bei Opel selbst, sondern bei zahlreichen kleinen und mittelständischen Zulieferern. Jörg Rolloch, European School of Management and Technology, Berlin, befürchtet, dass ein geschickt agierendes internationales Unternehmen nationale Regierungen bei Rettungsmaßnahmen gegeneinander ausspielen kann. Die Höhe von Subventionen könne dann bestimmen, welche Produktionsstätten erhalten werden. Insbesondere in der gegenwärtigen Krise zeige sich die Wichtigkeit der europäischen Wettbewerbspolitik. Für Helmut Becker, Institut für Wirtschaftsanalyse und Kommunikation, München, ist der sog. »staatliche Rettungsplan« im Falle Opel gescheitert. Und das sei auch gut so: Denn auch in diesem Fall wären die gesellschaftlichen Kosten einer künstlichen Lebensverlängerung mittels Steuermitteln größer als der gesellschaftliche Nutzen einer Reallokation der Arbeitskräfte. Willi Diez, Hochschule für Wirtschaft und Umwelt, Nürtingen-Geislingen, ist der Ansicht, dass der Strategiewechsel von General Motors, Opel doch als Tochterunternehmen weiter zu führen, nicht bedauert werden sollte. Die Verantwortung für das Überleben von Opel sei nämlich damit wieder dort, wo sie hingehöre – »beim Management des Mutterkonzerns und nicht in den Händen politischer Entscheidungsträger«.

This paper analyzes whether political connections of the boards of directors of publicly traded companies in the United States affect the allocation of government procurement contracts. It focuses on the change in control of both House and Senate following the 1994 election and finds that companies with boards connected to the winning (losing) party experience a significant and large increase (decrease) in procurement contracts after the election. The results remain significant after controlling for industry classifications as well as for several other company characteristics. The findings highlight one of the main avenues through which corporate political connections add value to U.S. companies.

We analyze the effect of Initial Public Offerings (IPOs) on industry competitors and provide evidence that firms experience negative stock price reactions to completed IPOs in their industry and positive stock price reactions to IPO withdrawals. Following a successful IPO in their industry, firms show significant deterioration in their operating performance. These results are consistent with the existence of IPO related competitive advantages through the loosening of financial constraints, financial intermediary certification, and the presence of knowledge capital. These aspects of competitiveness are significant in explaining the cross section of underperformance as well as survival probabilities for competing firms.

We use proprietary data to analyze the importance of retail banking relationships to commercial banks and their depositors when banks underwrite securities. We find lead underwriters’ retail customers benefit as they demand and end up with significantly more of the highly underpriced issues. We find it is actual underpricing beyond that predicted by grey markets that drive the differential demand from the lead bank retail clientele, suggesting that banks pass on information about underpriced initial public offerings to their retail depositors. We analyze banks’ incentives for such behavior and find evidence of banks benefiting through retail cross-selling—both brokerage accounts and consumer loans increase significantly.