NEWSLETTER of August 9, 2024

The following content has been added at finexpert:

KPMG
H1 2024 - PULSE OF FINTECH
2024 got off to a challenging start for the fintech market globally, driven by ongoing concerns related to geopolitical uncertainty and high interest rates. Total global investment declined from $62.3 billion to $51.9 billion between H2’23 and H1’24—the lowest six months of fintech investment since H1’20. All regions experienced a noticeable drop in fintech investment, with the EMEA region experiencing the sharpest drop—from $19.4 billion to $11.4 billion between H2’24 and H1’24. >more

Deutsche Bank Research
KREDITGESCHÄFT UND KONJUNKTUR: MÜHSAMER WEG AUS DER STAGNATION DEUTSCHLAND
Loans to companies and the self-employed barely increased at the start of the year (+0.7% year-on-year) and there is also little improvement in sight for Q2. The downturn in the industrial and real estate sectors is continuing, while there are signs of stabilization in the service sector. Demand for credit has recently turned positive and is likely to increase further in the wake of upcoming interest rate cuts. The start to the year for alternative sources of financing was also mixed. German GDP surprisingly contracted by 0.1% in Q2 compared to the previous quarter, which is likely to have been due to low corporate investment and weak construction with probably only moderately higher private consumer spending. There are hardly any signs of an upturn in H2 so far. For the year as a whole, GDP is therefore likely to only just miss out on stagnation. Trade policy risks remain high, particularly for German foreign trade. >more

Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
IWH-INSOLVENZTREND: INSOLVENZZAHLEN ERREICHEN IM JULI REKORDWERTE
According to the IWH Insolvency Trend, the current number of insolvencies of partnerships and corporations in Germany in July is 1,406. This is the highest figure in around ten years and also exceeds the most recent peak from April 2024. The number of insolvencies in July rose 20% compared to the previous month and is 37% higher than in July 2023. The current figure is 46% above the July average for the years 2016 to 2019, i.e. before the coronavirus pandemic. The increase in July was somewhat more pronounced than forecast by the IWH at the beginning of the month. The fact that there were a high number of working days in July only partially explains this increase. >more

World Economic Forum
GLOBAL GENDER GAP REPORT 2024
World Economic Forum - The Global Gender Gap Index annually benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index tracking the progress of numerous countries’ efforts towards closing these gaps over time since its inception in 2006. >more

CONTINUITY AND CHANGE ON CORPORATE BOARDS
Peter Cziraki, and Adriana Robertson
2024
The number of women on public company boards has increased dramatically in recent years. We study where these women directors came from and how they were absorbed. Since 2018, women with board experience obtain significantly more board seats than their male counterparts. Women directors are also more likely to have no previous board experience than men, indicating movement on both the intensive and extensive margin. Adding a woman director is associated with a transitory increase in board size roughly one third of the time. This increase is offset when an existing director rolls off. The bulk of this reversion happens within one year, and boards return to pre-addition size within three years. >more

GROWTH-PROMOTING BONUSES AND MERGERS AND ACQUISITIONS
Growth-Promoting Bonuses and Mergers and Acquisitions
Tor-Erik Bakke, Mathias Kronlund, Hamed Mahmudi, and Aazam Virani
2024
One-third of U.S. top executives have bonus incentives that are explicitly tied to the firm's size. We study how such "growth-promoting bonuses" influence firms' mergers and acquisitions (M&A) activities. We find that firms with bonus structures that promote growth are more prone to make acquisitions—especially acquisitions of a scale that help meet the bonus size target. We use shocks to sales from plausibly exogenous exchange-rate changes for exporting firms to identify these effects. Acquisitions by firms with growth-promoting bonuses have significantly lower abnormal returns, destroying value for the acquirers on average. These lower acquirer returns can be attributed to the selection of targets with lower synergies and, to a lesser extent, higher premiums paid. The growth-promoting bonuses tend to be sufficiently large such that—despite negative acquirer returns—the net monetary effect for executives who meet their sales bonus targets with a merger remains significantly positive. >more