How do bank-affiliated venture capitalists do deals? Towards a model of multiple investment logics

Purpose This paper aims to investigate German bank-affiliated venture capitalists’ investment practices and the emergence of their investment logics. Most studies focus on the investment behaviour of independent venture capitalists and little is known about dependent venture capitalists’ investment behaviour. The present study contributes to filling this gap in entrepreneurial finance literature. Design/methodology/approach The paper uses an exploratory qualitative research approach based on 27 semi-structured interviews with the top management of German bank-affiliated venture capitalists and industry experts to develop a conceptual model that explains the investment logics of bank-affiliated venture capitalists. A large amount of archival data has also been collected and used for the analysis. Findings The results indicate that bank-affiliated venture capitalists either follow an autonomous, contingent or hybrid investment logic. A bank-affiliated venture capitalist’s isomorphic focus – whether they feel isomorphic to the external venture capital environment or the internal parent bank’s environment – explains the emergence of multiple investment logics. Practical implications The paper encourages banks to get a better understanding of how the venture capital industry works and what they need to do to compete again independent venture capitalists. Banks and their affiliated venture capital units can improve their deal flows by recognising that they need to get accepted as an on-par investor in the venture capital environment. Originality/value The current study is the first of its kind investigating multiple investment logics by focussing on the link between different isomorphic habits and the specific context of bank-affiliated venture capitalists.

Kunst des Wartens – Zeitempfinden in Martin Mosebachs Roman Mogador (2016)

Sztuka czekania – percepcja czasu w powieści Mogador (2016) Martina Mosebacha Powieść Martina Mosebacha Mogador konfrontuje dwie kultury. Bohater – młody, odnoszący sukcesy pracownik banku z Niemiec – musi spędzić kilka tygodni w Maroku wśród jego mieszkańców. Musi zmierzyć się z obcymi zwyczajami i innym rytmem życia ludzi, którzy wydają się mieć znacznie więcej czasu i nie muszą poddawać się jego presji. W artykule skupiono się na przedstawieniach percepcji czasu (np. w czasie wolnym, w trakcie posiłków czy oczekiwania), która wydaje się jedną z najważniejszych różnic pomiędzy kulturą europejską a marokańską. Artykuł ma na celu opisanie ludzkiej tęsknoty za godnym przeżywaniem czasu, za tzw. slow life, która wydaje się pragnieniem ukrytym pod niepokojem i szybkością współczesnego świata. Art of Waiting – Perception of Time in Martin Mosebach’s Novel Mogador (2016) Martin Mosebach’s novel Mogador confronts two cultures; the protagonist, a young, successful, German bank employee must spend some weeks in Morocco among the locals. He has to deal with foreign customs and another rhythm of life among people who seem to have much more time and don’t have to subject themselves to the pressure of the clock. The article focuses on the depictions of time perception (e.g. during leisure time, meals, waiting, etc.), which seems to be one of the most important differences between them. The article aims to describe the human longing for dignified handling of time, for slow life, which seems to be a yearning hidden under the anxiety and speed of the modern world.

Reaching for Yield in the ABS Market: Evidence from German Bank Investments*

If regulation fails to differentiate between priced and idiosyncratic risk, it incentivizes investors to reach for yield. Studying securitization exposures on the balance sheets of German banks, I show evidence consistent with this prediction. Banks with tight regulatory constraints (low capital adequacy ratios) invest more in higher yielding ABSs conditionally on rating-implied regulatory risk weights. ABS investments of constrained banks tend to perform worse ex post in terms of collateral delinquency and lose value. Differences in bank sophistication, market power, or incentives to retain securitizations are unlikely to explain the riskier ABS investments of constrained banks.

A microanalysis of trade finance: German bank entry and coffee exports in Brazil, 1880–1913

The trade-finance nexus has enjoyed increasing interest in recent economic studies, but empirical evidence is scarce and studies from a historical perspective seem missing. This study analyses the effect of German bank entry on Brazilian coffee exports between 1880 and 1913 using firm-level data. I create an original data set on the yearly quantities of exported coffee and the credit received from the German Brasilianische Bank für Deutschland by export houses in Brazil. Using a difference-in-difference approach, I find that Brasilianische eased previously existing credit constraints, and that companies financed by Brasilianische exported significantly more than those that were not.

Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties

Lending cuts by banks directly affect the firms borrowing from them, but also indirectly depress economic activity in the regions in which they operate. This paper moves beyond firm-level studies by estimating the effects of an exogenous lending cut by a large German bank on firms and counties. I construct an instrument for regional exposure to the lending cut based on a historic, postwar breakup of the bank. I present evidence that the lending cut affected firms independently of their banking relationships, through lower aggregate demand and agglomeration spillovers in counties exposed to the lending cut. Output and employment remained persistently low even after bank lending had normalized. Innovation and productivity fell, consistent with the persistent effects. (JEL E32, E44, G01, G21, G32, R11, R23)

SME lending relationships

The article illustrates the importance of the German Credit Guarantee Scheme to overcome credit restrictions for small and medium-sized enterprises (SMEs). By analysing the results of semi-structured interviews with German bank managers, it is demonstrated that the provision of a guarantee from a guarantee bank fosters learning by creating lending relationships and allowing a diminution of information asymmetries. Moreover, the research reveals some new aspects regarding the profitability of lending banks. The respondents indicate that profits rather decrease when a guarantee from a guarantee bank is included. However, the results also reveal that the provision of additional services (known as cross-selling) and the support of the region are considered to have a positive impact on the overall profitability and therefore on the willingness to include guarantees that make available bank loans to SMEs. Consequently, the research provides empirical results that expand existing conceptual literature.