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on Corporate Finance |
| By: | Lars Hornuf; Tobias Schilling; Armin Schwienbacher |
| Abstract: | It is often assumed that entrepreneurs retain more control of their venture when they opt for equity crowdfunding as compared to venture capital, notably because crowd investors are passive. We study whether crowd investors are indeed passive by analysing the cash flow and control rights crowd investors receive in equity crowdfunding in Germany, where more flexible contracts are offered than in many other countries. We document that in Germany many of the rights used in venture capital investment contracts are also used in equity crowdfunding contracts. We find that crowd investors are asked to pay higher prices if they receive more cash flow and exit rights, consistent with the fact that these rights are valuable to the crowd. However, these rights have no meaningful economic impact, since they do not affect campaign outcome, the likelihood of securing follow-on funding, nor the likelihood of liquidation of the venture. These results are inconsistent with control rights theory that predicts positive impacts, in contrast to results documented for venture capital contracts. Rather, our results suggest that crowd investors are passive investors whose control rights are ineffective or not exercised. |
| Keywords: | crowdfunding, crowdinvesting, financial contracting, venture capital |
| JEL: | G34 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7884&r=all |
| By: | Stadtmann, Georg; Croonenbroeck, Carsten |
| Abstract: | In early 2019, the stock prices of the German company Wirecard AG experienced market turmoil after several critical reports on activities claimed to be illegal. To analyze the market impact of news, we use stock price data for Wirecard AG and apply the reversed news model. We elaborate on whether new information can explain subsequent changes in the stock price. We find that articles published in the Financial Times as well as investor communications were important drivers of the stock price. |
| Keywords: | News Model,Stock Market Efficiency,Event Study |
| JEL: | D82 G14 G32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:euvwdp:414&r=all |
| By: | Linsi, Lukas Andreas; Hopkin, Jonathan; Jaupart, Pascal |
| Abstract: | Existing studies of the political determinants of top incomes and inequality tend to focus on developments within individual countries, neglecting the role of potential interdependencies that transcend national borders. This article argues that the sharp rises in top incomes around the world in recent years are in part a product of specific features of the US political economy, which were subsequently exported to other economies through the global expansion of US-based financial investors. To test the argument, we collect fine-grained micro-level data on executive pay and firm ownership structures for a comprehensive sample of publicly listed firms in the United Kingdom (UK). Our analyses uncover robust evidence that the Americanization of UK firm ownership leads to sizable pay increases for high-level managers at those firms. Scrutinizing the causal mechanisms underlying this effect, we find them to be more consistent with changes in executive bargaining power than market-related factors such as skills premia or better corporate performance. The findings have important implications for the literature on the international political economy of inequality. |
| Keywords: | inequality; winner-takes-all; foreign investments; top incomes; corporate governance |
| JEL: | A10 C10 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102217&r=all |
| By: | Grosskurth, Philipp |
| Abstract: | This paper introduces a simple procedure to construct ownership maps in Stata, uses a new method to map the development of the global network of multinational business groups over time and investigates the development of core components of the network. Based on Bureau van Dijk's ORBIS database, a full panel of ownership structures from 2000-2018 is reconstructed. The data is subjected to a descriptive analysis and subsequently used to identify key locations within the network. Ownership structures are used to identify outliers in the network even in the absence of financial data on the firm level. The identified locations largely overlap with results in the literature, but also point towards previously overlooked destinations. The aggregate ownership network at the country level is used to provide an intertemporal perspective on countries' development paths within the global network of multinational companies and sheds new light on MNE's expansion paths. |
| Keywords: | MNE,ORBIS,ownership,control,business groups,conduit countries,visualization,network analysis,corporate strategy,firm-level data,country index,complexity |
| JEL: | H25 F23 G30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:825&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | The study examines the role of governance in modulating the effect of capital flight on industrialisation in Africa. The empirical evidence is based on Generalised Method of Moments and governance is bundled by principal component analysis, namely: (i) political governance from political stability and “voice and accountability”; (ii) economic governance from government effectiveness and regulation quality; and (iii) institutional governance from corruption-control and the rule of law. First, governance increases industrialisation whereas capital flight has the opposite effect; and second, governance does not significantly mitigate the negative effect of capital flight on industrialisation. Policy implications are discussed. |
| Keywords: | Econometric modelling; Capital flight; Governance; Industrialisation; Africa |
| JEL: | C50 F34 G38 O14 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:19/077&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | The study examines the role of governance in modulating the effect of capital flight on industrialisation in Africa. The empirical evidence is based on Generalised Method of Moments and governance is bundled by principal component analysis, namely: (i) political governance from political stability and “voice and accountability†; (ii) economic governance from government effectiveness and regulation quality; and (iii) institutional governance from corruption-control and the rule of law. First, governance increases industrialisation whereas capital flight has the opposite effect; and second, governance does not significantly mitigate the negative effect of capital flight on industrialisation. Policy implications are discussed. |
| Keywords: | Econometric modelling; Capital flight; Governance; Industrialisation; Africa |
| JEL: | C50 F34 G38 O14 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:19/077&r=all |
| By: | Müting, Miriam |
| JEL: | F34 G11 G21 G28 L10 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc19:203647&r=all |
| By: | Kogler, Michael |
| JEL: | G21 G28 H25 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc19:203533&r=all |