Andreas W. Rathgeber

The route to resource-efficient novel materials

Combining the efforts of physicists, materials scientists, economists and resource-strategy researchers opens up an interdisciplinary route enabling the substitution of rare elements by more abundant ones, serving as a guideline for the development of novel materials.

Economic Development Matters: A Meta-Regression Analysis on the Relation between Environmental Management and Financial Performance

Although the existing body of empirical literature on the relation between corporate environmental performance (CEP) and corporate financial performance (CFP) is continuously growing, results are still inconclusive about this fundamental question in industrial ecology. Comparisons are difficult because of various estimation methods as well as the overall heterogeneous and complex interaction between the two constructs, but especially because of country‐specific data sets. Consequently, we raise the question of whether regional differences are the driving force buried underneath the inconclusiveness. Therefore, the aim of this article is to explore this heterogeneity by aggregating 893 existing results from 142 empirical primary studies that are based on more than 750,000 firm‐year observations. Our findings suggest a convex impact of a countrys economic development on the magnitude of the CEP‐CFP effect (i.e., the effect is positive in developing countries, disappears in emerging countries, and is again positive in highly developed countries). We also find that the overall positive relation strengthens for market‐based CFP measures and diminishes for countries with civil law systems, firms from the service sector, reactive environmental activities, and process‐based CEP measures. Further, several aspects of the examined data sample and the inclusion of relevant control variables explain heterogeneity in previous research results.

Do stock markets react to soccer games? : a meta-regression analysis

ABSTRACT This study applies meta-regression analysis to aggregate a sample of 1126 empirical estimates of the stock market reaction to soccer matches collected from 37 primary studies. Our results indicate that winning a match is not associated with significant return effects for both national teams and individual clubs. In the case of lost matches, we find strong evidence for publication bias, i.e. negative returns are systematically overrepresented causing a biased picture of the true soccer match effect. After correcting for this bias, the mean return after losses by national teams becomes statistically insignificant and accounts for only basis points. In the case of individual clubs, the corrected impact of a loss is a significant basis points effect. In a further analysis, we identify various aspects of study design like regional differences, time period under examination and the design of empirical analysis to be responsible for the wide variation in previous study outcomes. Overall, our findings provide evidence against the hypothesis that stock markets are driven by sports sentiment in the case of national teams. Due to the existence of strong asymmetry in the returns after wins and losses of individual clubs, behavioural explanations cannot be fully ruled out.

Market Pricing of Credit Linked Notes: The Influence of the Financial Crisis

In Germany, structured financial products already account for 6–8% of all assets invested, proving that the market for these products is still very attractive for retail investors. A question often discussed in this context is whether these products are priced fairly. One of the latest contributions in this field is the paper by Rathgeber and Wang (2011), who analyzed the pricing of credit linked notes (CLNs) in the primary market. In this paper, we significantly extend the work of Rathgeber and Wang (2011) and analyze the effect of the 2007–9 financial crisis on the pricing of CLNs: specifically, on their pricing in the secondary market. Therefore, we analyse the pricing of ninety CLNs covering 13 555 daily quoted prices. In addition to the major finding that CLNs in the secondary market are not only overpriced but also underpriced in many cases, we discover that the overpricing of CLNs significantly decreased after the financial crisis.

Die Absicherung von Rohstoffrisiken — Eine Disziplinen über greifende Herausforderung für Unternehmen

ZusammenfassungModerne High-Tech Produkte benötigen spezifische Rohstoffe verschiedener chemischer Elemente. Insbesondere die so genannten seltenen Erden spielen aktuell und künftig eine besonders wichtige Rolle. Dabei unterliegen Verfügbarkeit und Preis dieser Rohstoffe in hohem Maße einer durch viele Einflussfaktoren bedingten Unsicherheit. Da Unternehmen oftmals über Jahre hinweg an bestimmte Rohstoffe gebunden sind, müssen sie dieser Gefahr mit vielfältigen Strategien begegnen. Hierzu wird in diesem Beitrag ein Disziplinen übergreifender und praxisorientierter Gesamtüberblick über Rohstoffrisiken und mögliche Absicherungsmaßnahmen gegeben. Diese sollen zunächst vorgestellt und aus Unternehmenssicht strukturiert werden. Anschließend werden ausgewählte Absicherungsmaßnahmen zur Behandlung exemplarischer Rohstoffrisiken näher beleuchtet.AbstractModern high-tech products require specific commodities of various chemical elements. Especially the so called rare earth metals play a crucial role — now and in the future. Availability and price of these commodities are highly subject to uncertainty, driven by multiple factors of influence. As businesses are bound to certain commodities for many years, they have to face this threat with versatile strategies. Hence, this paper provides an interdisciplinary and business-oriented overview of commodity risks and potential hedging strategies. They are presented and structured along a company within its market. Subsequently, selected measures for covering different commodity risks will be examined further.

Is the Convenience Yield a Good Indicator for a Commodity’s Criticality?

For some commodities, the strong increase in demand over the last decade will have major impact on their future availability. Thus, the importance of assessing a commodity’s criticality by means of criticality indicators continuously increases. In the literature, numerous indicators for criticality are proposed (e.g., spot prices, the Herfindhal-Hirschmann Index, etc.). In order to address some of the major shortcomings of these existing indicators, especially regarding their predictive power, we propose to use the convenience yield of commodity futures as criticality indicator. In the paper we aimed to test the applicability of the convenience yield as indicator for a commodity’s future criticality. Therefore we used historical convenience yields from 3, 15, and 27 months futures contracts for five major industrial metals. We compared the convenience yields at the beginning of the contracts with known criticality indicators until the time of maturity. We found evidence that the convenience yield in general has predictive power on the static stock lifetime (i.e. inventory volume / turnover) and future spot prices. Furthermore we show evidence that with some restrictions the convenience yield suits to be an applicable indicator for a commodity’s criticality.

Market pricing of credit-linked notes: The case of retail structured products in Germany

The volume of the primary market of certificates for retail investors has increased enormously in the past ten years, and German banks have recently started issuing credit-linked notes (CLNs). As with other types of certificates, the question can be raised as to whether coupon payments for these instruments are fair and adequate compared with the related risk and, if not, what the reasons for this mispricing are. In this paper we analyze the pricing of 136 outstanding CLNs and discover that CLNs are generally greatly overpriced in the primary market. Furthermore, we find strong evidence for an essential hypothesis that is still debated in the literature: the more complex the product and the less transparent the market, the more overpricing there tends to be.

Why Germany Was Supposed To Be Drawn in the Group of Death and Why It Escaped

Millions of football fans all over the world cast their eyes toward Leipzig, Germany, to follow the 2006 FIFA World Cup Draw December 9, 2005. Prior to the draw, 32 teams qualified for the World Cup. The draw divides those teams into eight groups, labeled A through H, of four teams each. Each group of four plays a roundrobin—every team plays every other team, for a total of six games within the group—and the top two teams in each group advance to the next stage. The question we want to raise here is about the mathematical fairness of the draw. Did all the top teams have the same chance of being placed in a group with a difficult opponent? To answer this question, we will take a look at the FIFA procedure for the draw. FIFA Rules

Output-Hedging of Electric Utility Firms: The Role of Electricity Derivatives Markets

Recent introductions of electricity derivatives markets create a unique setting for the analysis of output hedging of electric utility firms. We directly consult these financial innovations as a new measure of corporate hedging. In contrast to prior research focusing on endogenous variation in hedging behavior, this approach allows analyzing hedging as an exogenous event in order to overcome endogeneity problems. Based on a set of 16 events, the hedging behavior, the risk exposures, financing and investment decisions, and firm values are analyzed based on a sample of 159 firms form 40 countries for the years 2005–2015. The results show that the availability of electricity derivatives supports the decision to hedge and enables a firm to reduce its hedging volumes by substituting other hedging positions. Furthermore, electricity derivatives have a major impact on a firms diverse risk exposures. Additionally, electricity hedging significantly increases a firm’s debt capacity and investment expenditure. Surprisingly, electricity hedging has no firm value effect. Overall, the access to electricity derivatives markets is identified as a crucial country-level determinant for corporate hedging of electric utility firms. The results are highly relevant for electric utility firms, but also for market operators and policy makers.

If, When, and How Financial Decisions Affect Firm Value: A Meta-Analysis

We study the nexus among risk management, capital structure, and firm value by aggregating the existing competing explanations into a new integrated theoretical model, which we test by means of meta-analysis based on 411 empirical studies. We find that capital structure mediates the relation between risk management and firm value. Hence, risk management positively affects leverage by providing greater debt capacities. Further, leverage has a negative impact on firm value. Therefore, managers should leave debt capacities unused but should instead use additional internal funds, made available via from risk management, for carrying out profitable projects and research and development activities.