NEWSLETTER of October 8, 2021

The following content has been added at finexpert:

Oliver Wyman
ONLINE-WERTPAPIER-BROKERAGE 2021
In 2020, the securities culture in Germany took a decisive step forward and, as a solid revenue pillar, brought much joy not only to customers but also to German brokerage providers. Supported by the high market volatility in the Corona crisis as well as the related brisk customer activity, we have seen record numbers in the German market for 2020. The number of securities transactions has doubled compared to 2019 to between 160 and 180 million and revenues for German online brokers have increased by two-thirds from €1 billion in 2019 to between €1.6 and €1.7 billion. >more

PwC
DACH M&A INSIGHTS: H1 2021
In Germany, Austria and Switzerland, a total of 1696 deals took place in the first half of 2021 - a top figure (2nd half of 2020: 1531 deals). The deal market is thus well on its way to a new record - in the previous peak year of 2019, 1251 deals took place in the first half of the year and 1558 in the second half. Deal values have also increased, from €50.8 billion in the second half of 2020 to €73.6 billion in the first half of 2021. >more

IHS Markit | Mergermarket
THE ESG AGENDA: REVOLUTION OR EVOLUTION?
The COVID-19 pandemic, coupled with greater social and ecological awareness, has prompted a sea change in attitudes toward ESG. For the asset managers and PE firms charged with meeting those expectations, that presents opportunities and challenges. With that in mind, our survey of senior PE and asset management executives reveals not only where firms currently are on their ESG journey but the road ahead—one whose destination will determine who thrives and who falls by the wayside. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: SEPTEMBER 2021
In a regime of low and stable inflation, most of the fluctuations in headline inflation are due to price swings in finely defined expenditure categories rather than to generalised price movements, according to a new study released today in the Quarterly Review of the Bank for International Settlements (BIS). These changes tend to have only a transitory impact of inflation, which is thus more likely to remain range- bound. >more

REPORTING REGULATION AND CORPORATE INNOVATION
Matthias Breuer, Christian Leuz, and Steven Vanhaverbeke
2020
We investigate the impact of reporting regulation on corporate innovation. Exploiting thresholds in Europe’s regulation and a major enforcement reform in Germany, we find that forcing firms to publicly disclose their financial statements discourages innovative activities. Our evidence suggests that reporting regulation has significant real effects by imposing proprietary costs on innovative firms, which in turn diminish their incentives to innovate. At the industry level, positive information spillovers (e.g., to competitors, suppliers, and customers) appear insufficient to compensate the negative direct effect on the prevalence of innovative activity. The spillovers instead appear to concentrate innovation among a few large firms in a given industry. Thus, financial reporting regulation has important aggregate and distributional effects on corporate innovation. >more

BIG FISH IN SMALL PONDS: HUMAN CAPITAL MIGRATION AND THE RISE OF BOUTIQUE BANKS
Janet Gao, Wenyu Wang, and Xiaoyun Yu
2021
We study the comparative advantage of focused and multidivisional organizational forms at attracting valuable human capital. Using the M&A advisory industry as a laboratory, we show that high-performing individuals are more likely to migrate to boutique (focused) banks, particularly when facing cross-subsidization inside bulge bracket (multidivisional) banks, proxied by poor performance of their non-M&A departments. Such skilled labor migration improves the performance of boutique banks, potentially contributing to the rise of boutiques over the past two decades. Moreover, M&A deal outcomes differ when having boutique advisors. Our findings suggest corporate organizational structure and labor migration can jointly shape industry dynamics. >more