NEWSLETTER of October 28, 2022

The following content has been added at finexpert:

EY
EUROPEAN ESG FINTECH LANDSCAPING
Since 2016, investments in ESG FinTechs have increased strongly and the investment volume has gained further momentum in 2021 and 2022, especially after the European Green Deal 2020. There is a good chance that investments in Europe in the current year 2022 will surpass the record year 2021. In 2022 alone (as of mid-September 2022), more than $641 million has been invested, up from $844 million in 2021, according to a recent EY study on the development of the ESG FinTech landscape in Europe. >more

Thinking Ahead Institute
THE WORLD’S LARGEST ASSET MANAGERS – 2022
The pace of competition, consolidation and rebranding is quickening. Of the top 500 managers, almost half of the names featured on the list a decade ago, in 2012, are now absent. With food and energy prices hitting record highs, inflation and interest rates have become the paramount factors. >more

I-Advise AG
STUDIE ZU IMPLIZITEN MARKTRISIKOPRÄMIEN IN AUSGEWÄHLTEN AKTIENMÄRKTEN VON 2008 BIS 2022
The data of the study updated as of 30 September 2022 show a significant increase in the implied market risk premiums to most recently around 8.5% before personal taxes and 7.2% after personal taxes, while the average IMRP for the DAX/MDAX in the period from 2009 to 09/2022 is 7.0% before personal taxes and 5.8% after taxes. Sensitivity calculations of the IMRP with base rates accurate to the reporting date instead of three-month averages according to the IDW method result in a lower IMRP before personal taxes of 7.9% as at 30 September 2022. However, the delayed adjustment of analysts' estimates in view of the significant decline in share prices may lead to an overestimation of the currently determined reporting date IMRP. There is a high correlation between implied market returns and the base rate, so that a stable market risk premium rather than a stable market return can be concluded. >more

BDO | Kirchhoff
NACHHALTIGKEIT IM WANDEL: DIE NICHTFINANZIELLE BERICHTERSTATTUNG IM DAX 160
The importance of sustainability has now also reached the level of the management boards of listed companies in Germany. With specific key performance indicators (KPIs) in the variable compensation of the board of management as a whole as well as board departments with reference to corporate social responsibility (CSR), the incentive for boards of management to make their company more sustainable is increasing. These and other conclusions can be drawn from this year's study "Sustainability in Transition" by BDO AG Wirtschaftsprüfungsgesellschaft and the consulting firm and communications agency Kirchhoff Consult AG. >more

PwC
NET ZERO ECONOMY INDEX 2022
The results of the new Net Zero Economy Index make it clear that the development of global decarbonization is falling dramatically short of the targets needed to meet the Paris climate agreement. Nearly half of the G20 countries saw an increase in their emissions in 2021. This includes Germany, whose decarbonization rate fell back into negative territory in the new reporting period, with CO2 emissions growing by 1.67 percent, following last year's already only average figure. This is problematic in that the globally required decarbonization rate was already 12.9 percent last year, while the global community only averaged 0.5 percent. The consequence of this shortfall: The new benchmark now grows to 15.2 percent. >more

ATTENTION INDUCED TRADING AND RETURNS: EVIDENCE FROM ROBINHOOD USERS
Brad M. Barber, Xing Huang, Terrance Odean, and Christopher Schwarz
2021
We study the influence of financial innovation by fintech brokerages on individual investors’ trading and stock prices. Using data from Robinhood, we find that Robinhood investors engage in more attention-induced trading than other retail investors. For example, Robinhood outages disproportionately reduce trading in high-attention stocks. While this evidence is consistent with Robinhood attracting relatively inexperienced investors, we show that it can also be partially driven by the app’s unique features. Consistent with models of attention-induced trading, intense buying by Robinhood users forecast negative returns. Average 20-day abnormal returns are -4.7% for the top stocks purchased each day. >more

ENTREPRENEURIAL TEAMS: DIVERSITY OF SKILLS AND EARLY-STAGE GROWTH
Francesco D'Acunto, Geoffrey A. Tate, and Liu Yang
2022
We use employer-employee linked data to track the employment histories of team members prior to startup formation for a full cohort of new firms in the U.S. Using pre-startup industry experience to measure skillsets, we find that startups that have founding teams with more diverse collective skillsets grow faster than peer firms in the same industries and local economies. A one standard deviation increase in teams’ skill diversity is associated with an increase in five-year employment (sales) growth of 16% (10%) from the mean. The effects are stronger among startups in innovative industries and among startups facing greater ex-ante uncertainty. Moreover, the results are robust to a variety of approaches to address the endogeneity of team composition. Overall, our results suggest that teams with more diverse collective skillsets adapt their strategies more successfully in the uncertain environments faced by (innovative) startup firms. >more