German Investment Research Articles

‘Pioneers of culture’: Australian natural history and the German colonial imaginary

ABSTRACT Many contemporary efforts to attend to the coloniality of nineteenth-century natural collections rely on the reconceptualization of items held in these collections as cultural belongings. After describing the significance of this development, the article seeks to complicate the hope invested in ‘culture’ in this particular context. It argues that it resonates rather strangely, at least with the German historical record, where a particular understanding of natural history as performing the work of culture was articulated at precisely the time these collections were being made. With a particular focus on what nineteenth-century German-language publications wrote about Richard Schomburgk, a Prussian-trained naturalist and long-time director of the Adelaide Botanic Garden, it analyses how German-speaking actors moving within British colonial networks were framed as ‘pioneers of culture’. The article argues that the figure of the ‘pioneer of culture’ embodied a German investment, real and imagined, in Anglophone settler colonialism; that it helped to describe natural history collecting as central rather than peripheral to this colonial imaginary; and that it denoted a wilful refusal to acknowledge the violent nature of both enterprises.

Taxes and the Investment of Mutual Funds - Evidence from the German Investment Tax Reform

Taxes and the Investment of Mutual Funds - Evidence from the German Investment Tax Reform

Towards green hydrogen? – A comparison of German and African visions and expectations in the context of the H2Atlas-Africa project

Green hydrogen promises to be critical in achieving a sustainable and renewable energy transition. As green hydrogen is produced with renewables, green hydrogen could become an energy storage medium of the future and even substitute the current unsustainable grey or blue hydrogen used in the industry. Bringing this transition into reality, for instance, in Germany, there are visions to rapidly build hydrogen facilities in Africa and export the produced green hydrogen to Europe. One problem, however, is that these visions presumably conflict with the visions of actors within Africa. Therefore, this study aims to provide an initial assessment of African stakeholders' visions for future energy exports and renewable energy expectations.By comparing visions from Germany and Africa, this assessment was conducted to identify differences in green energy and hydrogen visions that could lead to conflict and similarities that could be the basis for cooperation. The National Hydrogen Strategy outlines the German visions, which clarifies that Germany will have to import green hydrogen to meet its green transition target. In this context of future energy export demand, a partnership between German and African researchers on assessing green hydrogen potentials in Africa started. The African visions were explored by surveying the partners from different African countries working on the project.The results revealed that while both sides see the need for an immediate transition to renewable energy, the African side is not envisioning the immediate export of green hydrogen. Based on the responses, the partners are primarily concerned with improving the continent's still deficient energy access for both the population and industry. Nevertheless, this African perspective greatly emphasises cross-border cooperation, where both sides can realise their visions. In the case of Germany, that German investment could build infrastructure, which would benefit the receiving African country or countries and open up the possibility for the envisioned green hydrogen export to Europe.

Investiranje u "Sondervermögen" fondove u Nemačkoj - analiza pravne strukture, regulatornih zahteva i performansi

This paper provides an analysis of "Sondervermögen fonds", or special investment funds, in Germany. These funds are structured as separate accounts, providing additional protection for investors, as their assets are legally separate from the assets of the fund manager. The Federal Financial Supervisory Authority (BaFin) regulates "Sondervermögen fonds", ensuring that they are managed responsibly and in compliance with the German Investment Code (Kapitalanlagegesetzbuch or KAGB). The KAGB sets out the legal framework for the operation of "Sondervermögen fonds" and covers various aspects, including authorization, investment restrictions, custody and administration of assets, supervision, and regulatory measures. The paper describes the legal structure, regulatory requirements, and performance of "Sondervermögen fonds", highlighting their advantages over other investment vehicles. "Sondervermögen fonds" have become a significant tool for investors in Germany and are expected to continue playing a crucial role in the country's investment landscape.

Enzensberger’s Illusions

Enzensberger’s Illusions

Economic integration, industrial structure, and catch‐up growth: Firm‐level evidence from Poland

AbstractWe examine if and how deeper economic integration with high‐income nations impacts industrial performance. We exploit Poland's accession to the EU in 2004 as a source of variation in the degree of market integration with Germany. Using data on Polish manufacturing firms in the period 1995–2013, we find that EU accession was followed by significant within‐firm growth in output and productivity, notably in industries in which Germany was more specialized at the moment of accession. Increased flows of German investment to these sectors played an important role in shaping these effects.

Russia's sanctions policy in the context of the First World War

The article is devoted to the analysis of the sanctions policy of the Russian Empire towards the countries that were its opponents in the First World War. Such states included Germany, Austria-Hungary, Bulgaria, and Turkey, which joined forces in the military bloc of the Central Powers to fight the Allies.
 The victories of the member states of the Entente bloc were forged not only on the fronts, but also achieved through the partial or complete abolition of trade, financial and economic relations with the countries of the Fourth Bloc. The aim of this paper is to study and comprehend the experience of imposing sanctions by the Russian Empire against states that participated in the war against it during the war of 1914-1918. , which is waging a long-running hybrid war with Ukraine. The article demonstrates an example of an adequate response of state institutions to encroachment on the territorial integrity and sovereignty of the country. It has been proved that immediately after the start of hostilities, measures were taken against the subjects of the states fighting against Russia to limit their legal capacity and legal capacity. They could be deported both outside the country and outside its individual localities.
 These people were allowed to enter Russia only with the permission of the relevant authorities. Merchant ships of countries fighting against Russia, seized in Russian ports, were detained. Merchant ships built for foreign countries were confiscated and converted for military purposes.
 Investment policy has also been revised. This is confirmed by the approval by the Russian emperor in 1915 of the Regulations on the Liquidation of Trade Enterprises Belonging to Enemy Citizens, which referred to the liquidation of enterprises and joint-stock companies that co-owned with Russian nationals. It is noteworthy that only those enterprises that operated at the expense of German, Austrian, Hungarian or Turkish investments were subject to liquidation. Other normative legal acts abolished the right of ownership of land of the same group of foreign citizens.
 The result of the scientific article was the conclusion that by applying the emergency legislation, the Russian government did everything possible to prevent national security from financing the citizens of those countries that were at war with it.

Direct German investments in the Russian economy: regional cross-section

Economic relations between Russia and Germany are developing in the context of such global challenges as the aggravation of the international political situation, the introduction of anti-Russian sanctions, the economic recession against the background of the Covid-19 pandemic. The subject of this study is the regional peculiarities of the placement of German capital on the territory of Russia. The object of the study is 55 subjects of the Russian Federation, which are recipients of direct German investments. The authors focus on studying the dynamics, species and geographical structure of accumulated direct German investments in the context of individual subjects and federal districts. The article assesses the level of differentiation of direct German investments within individual federal districts, calculates sub-federal investment positions, identifies trends in investment cooperation between Russian and German enterprises carried out within the framework of special economic zones. It is established that the factors contributing to the placement of German capital in European Russia are the preferential localization of special economic zones in this part of the country, as well as the conclusion of special investment contracts on the basis of already functioning production facilities. According to the results of the study, the authors summarize that the current regional structure of German investments does not contribute to the achievement of such a task provided for by the Spatial Development Strategy of the Russian Federation as the reduction of interregional socio-economic imbalances. The scientific novelty of this study is to develop recommendations for expanding investment cooperation between Russia and Germany in the Far East, special attention is paid to the role of state institutions. The authors substantiate that the implementation of investment projects for the production of wind power units and assemblies, solar panels, as well as the construction of wind and solar power plants in the Far East should be considered as a promising area of cooperation between Russia and Germany.

"Немецкий вопрос" в казахстанско-германских отношениях в начале 1990-х гг.

In the article based on new archive data from Republic of Kazakhstan Ministry of Foreign Affairs fund the factor of German diaspora in regards of Kazakhstan-German relations' establishment and development is considered.“German Issue” is considered as ethnical Germans' requirement to revive their national identity and to restore unfairly destroyed statehood. For this purpose, Germans' public organizations were established, e.g. “Wiedergeburt” (“Revival”). The failure to resolve the “German Issue” led since the late 1980s to Germans' massive migration from the USSR and later from post-Soviet countries. The largest outflow of German population was from Kazakhstan, where almost half of all soviet Germans lived. The FRG struggling from excessive number of entrants stopped the migration flow, at the same time German diaspora located in Kazakhstan could be useful for German entrepreneurs. Kazakhstan Government also wanted to stop Germans' massive departure; moreover, German diaspora could attract German investments to Kazakhstan. Both countries governments' interests coincided in regards of ethnical Germans holding back on their places of residence. After discussions the countries introduced the mutual concept that Kazakhstan government will ensure the revival of culture and language of German ethnos, at the same time help from Germany will be used also in favor of those “nationalities that live together with Germans”. Both countries' governments have chosen public organizations of Germans in Kazakhstan as intermedium. Separate “Wiedergeburt” communities formed in Republic in 1989, then in 1992 they were united. The consolidation of Kazakhstan Germans' public organizations was conducted with German politics' participation. On the February 11, 1992 the countries established diplomatic relations. DuringN.A. Nazarbayev's visit to FRG in September 1992 “German Issue” was discussed as one with the highest importance and was connected to Kazakhstan economic relations development. However, German national-administrative units were not created in Kazakhstan. Another side of the issue - Kazakhstan Germans' ethnical identity development - was realized by “Revival” organization with support of Germany and Kazakhstan. German side invested a lot of funds and efforts to help German ethnos. In November 1994 Kazakhstan Republic government adopted “Complex Program of Ethnical Revival of Germans residing in Kazakhstan”. In 1994 Intergovernmental Kazakhstan-German commission on the Germans' issues living in Kazakhstan was formed. However, on this stage the Germans did continue leaving Kazakhstan, slowing down although; at the same time German investments, as the whole German business, were poorly presented in Kazakhstan in 1990s. Nevertheless, the relations between Kazakhstan and Germany were established and were developing and “Revival” became a connecting link between two countries' governments and Kazakhstan Germans.

Towards Deeper Judicialisation: Explaining Thailand’s Increasing Engagement with International Adjudication

This paper calls attention to a little-noticed phenomenon about the Thai government’s increasing involvement in international adjudication over the last two decades. For the first time, it has participated in the advisory proceedings before the ITLOS, and made oral statements in the advisory proceedings before the ICJ. It has faced the first treaty-based arbitration by a German investor. There has also been an attempt to initiate the proceedings at the International Criminal Court against Thai officials. All of these parallel the government’s extensive participation in the dispute settlement mechanism of the WTO. What accounts for such developments? The paper argues that Thailand’s constantly increasing engagement with international adjudication should be understood as part of the judicialisation of international relations. Specifically, it is shaped by four main conditions. First, the Thai government has cautiously yet constantly expanded its acceptance of jurisdiction of courts and tribunals. Second, the number of potential claimants has exponentially increased. Third, the composition of the international litigator communities has changed, resulting in the significant increase in the number of lawyers willing to pursue new cases. Fourth, Thai government officials are learning to strategically make themselves more visible in the litigator communities.

Recent Changes in the German Investment Screening Mechanism in Light of the EU Screening Regulation

In 2020 and 2021, the German investment screening laws, namely Außenwirtschaftsgesetz (AWG) and Außenwirtschaftsverordnung (AWV) were again subject to considerable reform induced by new legislation at the European level and a reshaped industry policy agenda at the national level. This article critically reviews the most significant changes brought about by one law (Erstes Gesetz zur Änderung des Außenwirtschaftsgesetzes und anderer Gesetze) and three ordinances (Fünfzehnte, Sechzehnte und Siebzente Verordnung zur Änderung der Außenwirtschaftsverordnung) and provides an overview of the reformed screening procedure. Although claims in this direction have been made, neither the reform nor the underlying Screening Regulation (EU) 2019/452 have altered the objective of review – the protection of public order or security – or bar for governmental intervention – actual and sufficiently serious danger. Both these were not ‘overwritten’ by secondary law and continue to be determined by the pertinent jurisprudence of the Court of Justice of the European Union. Notwithstanding this, the reform has considerably widened the ‘sensitive sectors’ in which pertinent investments must be notified to and cleared by the authorities. ‘Gun jumping’ is prohibited and parties moving forward nonetheless risk criminal prosecution. Reform has also standardised the deadlines for governmental intervention and brought about procedural clarity. What the many and frequent changes reveal on a more fundamental level is a progressing politicisation and securitisation of investment screening law.

Investment and Economic Situation Analysis of Germany

This article starts with the Preliminary Information of German investment and economic conditions, and then studies the financial markets at all levels in Germany, as well as government-ed fiscal issues, analyzes the German economic status through foreign debt, IMF programs and various indicators, and then introduces the status of German economic reforms. And the im pact of the international situation on the German economy, and then through risk analysis, the development of the German economy and investment can be obtained.

Net Present Value, Duration, and CAPM in Light of Investment Theory: A Comment on Kruk

In her paper “Corporate Risk Evaluation in the Context of Austrian Business Cycle Theory” recently published in this journal, Joanna Kruk aims to investigate how artificially low interest rates resulting from central bank intervention distort individual investment appraisals and ultimately result in both entrepreneurial misjudgment and resource-wasting malinvestment, fueling the business cycle. She identifies entrepreneurs’ net present value calculations, supposedly unadjusted for risk, as a major issue and suggests adjusting those calculations for risk via both the duration method and the Capital Asset Pricing Model to mitigate the distorting effects. Her argumentation is, however, trapped in neoclassical reasoning and is adversely affected by several misconceptions of the net present value criterion. This comment seeks to reveal those fallacies and explain how to address uncertainty when using net present value calculations to make those calculations part of the solution rather than part of the problem of entrepreneurial misjudgment. The findings are derived from German investment theory rooted in the Austrian school of thought, meaning that they differ compared to those of neoclassical finance theory.

Explaining German outward FDI in the EU: a reassessment using Bayesian model averaging and GLM estimators

The last decades have seen an increasing interest in FDI and the process of production fragmentation. This has been particularly important for Germany as the core of the European Union (EU) production hub. This paper attempts to provide a deeper understanding of the drivers of German outward FDI in the EU for the period 1996–2012 by tackling the two main challenges faced in the modelization of FDI, namely the variable selection problem and the choice of the estimation method. For that purpose, we first extend previous BMA analysis developed by Camarero et al. (Econ Model 83:326–345, 2019) by including country-pair-fixed effects to select the appropriate set of variables. Second, we compare several estimation methods in their multiplicative form, namely four versions of the generalized linear model. The results of the empirical application indicate that Gamma pseudo-maximum likelihood is the best performing estimator. Furthermore, our results point to horizontal-ness as the primary strategy for German investment in core EU countries, while vertical-ness seems to prevail in peripheral EU countries.

Medicinal Products and the Screening of Foreign Direct Investment

According to the European Union (EU) as well as several Member States, increased foreign direct investment (FDI) is a potential threat to public security and order. Over the past two years, numerous amendments were made to German investment control law: on the one hand, in view of the new European legal framework (‘EU Screening Regulation’) and, on the other hand, against the background of the threat that the COVID-19 pandemic posed to the supply of health commodities. This article shows which of these new rules apply to the pharmaceutical industry and offers a view on how they may affect the supply of medicines in Germany and the EU in view of their aim to protect national security interests. © 2021, Lexxion Verlagsgesellschaft mbH. All rights reserved.

Determinants of Hedge Fund Investment in Corporate Endgames

Under German law the corporate endgame process of obtaining full control over a company offers multiple investment opportunities for investors with high investment flexibility, and is therefore particularly attractive to hedge funds. This paper investigates the determinants of hedge fund investment in corporate endgame processes based on a sample of 76 endgame situations of publicly listed German companies and investment data of 326 hedge funds. Examining characteristics of investment targets, we find that hedge funds invest in companies with a non-dominant majority owner and a high stake of index funds as latter’s limited ability to react in change of control situations creates a supportive investment environment. Hedge funds are most likely to invest after takeover consummation and before announcement of a new endgame transaction. Investigating the determinants of ongoing engagement after initial investment, we find that the ownership of other institutional investors, especially hedge funds, positively affects engagement likelihood, serving as a validation of the own investment approach. Abnormal performance and trading liquidity of target stock also positively affect hedge funds’ engagement. The results indicate that the endgame process in Germany is an attractive investment opportunity for hedge funds, while their involvement also adds complexity to the corporate control process.

Re-Evaluating Cryptocurrencies’ Contribution to Portfolio Diversification – A Portfolio Analysis With Special Focus on German Investors

In this paper, we investigate whether mixing cryptocurrencies to a German investor portfolio improves portfolio diversification. We analyse this research question by applying a (mean variance) portfolio analysis using a toolbox consisting of (i) the comparison of descriptive statistics, (ii) graphical methods and (iii) econometric spanning tests. In contrast to most of the former studies we use a (broad) customized, Equally-Weighted Cryptocurrency Index (EWCI) to capture the average development of a whole \textit{ex ante} defined cryptocurrency universe and to mitigate possible survivorship biases in the data. In our in-sample analysis we find that cryptocurrencies can improve portfolio diversification in a few of the analyzed windows from our dataset (consisting of weekly observations from 2014-01-01 to 2019-06-01). However, we cannot confirm this pattern as the normal case. By including cryptocurrencies in their portfolios, investors predominantly cannot reach a (significantly) higher efficient frontier. However, an additional out-of-sample analysis shows, that risk-bearing investors can benefit from the consideration of cryptocurrencies in their portfolio allocation eventhough the optimal portfolio weights were mostly small or even close to zero percent.

Valuation of renewable energy investments: an explanatory mixed-methods study about applied approaches amongst practitioners

The purpose of this explanatory, sequential, mixed-methods study is to learn about the applied valuation processes for renewable energy investments to explore key value drivers, best practice approaches and improvements amongst Swiss and German investment professionals. The results demonstrate that both systematic and unsystematic risks are relevant. Risk preferences and subsequently valuation are clearly influenced by experienced materialisation of risk. Discounted cash flow (DCF)-based valuation is state of the art in this valuation, while encountered risks are adjusted either in the cash flows or in the applied discount rate. The internal rate of return (IRR) approach is most frequently applied, predominantly within a simplified flow to equity (FTE) valuation approach. Market participants surprisingly still use the weighted average cost of capital (WACC) of the investing company, mostly as a basis for defining hurdle rates. For assessing investments' value protection abilities and performing impairment tests, the less known but more consistent DCF-based certainty equivalent (CE) and adjusted present value (APV) approaches could be introduced.

What drives German foreign direct investment? New evidence using Bayesian statistical techniques

Despite the importance of Germany as an issuer of foreign direct investment (FDI), the studies analyzing its determinants are far from conclusive. This research contributes to filling this gap providing new evidence for the period 1996–2012. In order to reduce model uncertainty, we adopt a Bayesian model averaging (BMA) approach. We find that determinants associated with horizontal FDI appear to be dominant for explaining FDI in developed countries while for the group of developing countries covariates associated with vertical FDI motives play a larger role. Within Europe, while the majority of FDI is horizontally driven in “core” countries, in the “periphery” vertical motivations seem to prevail. Moreover, our results are compatible with more complex FDI models where vertical determinants and institutional variables are gaining prominence as does the leading role currently played by Germany in global value chains (GVC). Our results may provide hints for policymakers’ strategies to attract German investment.

Russian-German investment relations in the context of digital transformation of the state and financial sector of the economy

The digitalization of the economy opens up new opportunities for business and the development of interstate investment cooperation, which is caused by the objective strengthening of globalization processes at all levels. The impact of digital technologies on all sectors of the economy is constantly growing. Digital technologies have become the main drivers for financial market transformation, FDI flows development and created new challenges for the next few years. German-Russian investment relations are closely linked to political and digital transformation which requires developing and introducing new solutions that enable interaction among market participants, so the analysis of investment relations between Russia and Germany in the context of digital transformation is relevant for the study. German FDI in Russia and Russian FDI in Germany are presented in the article. Geographical distribution of Russian and German investments are studied. Sustainability of Russian direct investment in Germany is discussed. Industries of investments in the context of digital transformation are defined. Particular attention has been paid to the problems in the field of investment, which have hampered mutually beneficial cooperation between these countries. The prospects for the development of Russian-German relations and the efforts of the Russian side to revive an effective economic policy are considered.