Publication database

It is 25 years since the European Union (EU) agreed to complete the European Single Market (SM) in goods, services, people, and capital. While many barriers to the free movement of capital across borders have been removed, some important practical hurdles are still in place. The euro crisis has shown that the European financial sector in particular remains vulnerable and fragmented and this poses serious risks to the stability of both national economies and the euro area as a whole. In 2015, the European Commission therefore set out a list of measures to establish an integrated capital market in the EU by 2019.
The first part of this policy paper analyzes the channels through which financial integration affects growth, stability, and convergence in the EU, including capital allocation, production specialization, diversification of risk, and access to investment opportunities. The second part takes stock of persisting administrative and legal hurdles that impede full market integration. In particular, this paper distinguishes between a firm-level perspective, investors, and banks in its analysis. The final part provides some specific recommendations to improve the internal market for capital in the EU.

The thre­at of in­s­er­ting hard­ware Tro­jans du­ring the de­sign, pro­duc­tion, or in-field poses a dan­ger for in­te­gra­ted cir­cuits in re­al-world ap­p­li­ca­ti­ons. A par­ti­cu­lar cri­ti­cal case of hard­ware Tro­jans is the ma­li­cious ma­ni­pu­la­ti­on of third-par­ty FPGA con­fi­gu­ra­ti­ons. In ad­di­ti­on to at­tack vec­tors du­ring the de­sign pro­cess, FPGAs can be in­fil­tra­ted in a non-in­va­si­ve man­ner after ship­ment through al­te­ra­ti­ons of the bit­stream. First, we pre­sent an im­pro­ved me­tho­do­lo­gy for bit­stream file for­mat re­ver­sing. Se­cond, we in­tro­du­ce a novel idea for Tro­jan in­s­er­ti­on.

We examine the role of career preferences, ability, and structural constraints in explaining first-time employment in startups or established firms. Using panel data on 2,243 U.S. science and engineering PhDs observed before and after entering the job market, we find that ex ante career preferences significantly explain who joins a startup, while ability plays a limited role. Many individuals who prefer to join startups prior to graduation take jobs in established firms, in part due to the limited availability of startup jobs and visa constraints. Interestingly, these individuals are more likely to leave their first position in established firms jobs to join a startup later in time. We discuss implications for founders, managers in established firms, as well as for future research and policy makers.

With permission of the Academy of Management

In this joint study, the Hidden Champions Institute (HCI) of ESMT Berlin and IDG Research Services look into the question of whether the hidden champions are leading the digital transformation of the German economy. More precisely, the study compares the digital transformation among hidden champions to other companies and analyzes their challenges. The result shows that the German hidden champions take the digital revolution seriously and are working vigorously on positioning themselves more digitally, both regarding internal processes and in relation to new business models. In the process, they are considerably quicker and more successful than many small and medium-sized enterprises (SMEs) that are not market leaders. However, in comparison to large corporates, the digital transformation of the hidden champions frequently lags behind, requiring them to learn from companies within their own ranks that are among the global leaders in the digital transformation. There are indeed such “hidden digital champions”, as the study shows.

With permission of IDG Business Media German edition of the study: Hidden Champions - Champions der digitalen Transformation?.

In its 2018 coalition agreement, the German federal government has set itself the goal of adopting a "Blockchain strategy" in this legislative period. As part of the planned promotion of Distributed Ledger and Blockchain technologies, the government wants to create a framework for the development and application of these technologies and test them in public administration. The Federal Ministry of Economics and Energy and the Federal Ministry of Finance are jointly in charge of developing the strategy. On this occasion, in a workshop on 3 July 2018 at the Digital Society Institute of ESMT Berlin, 35 experts from politics, business and science discussed how a national blockchain strategy can be practically organized. The discussion focused on the questions of what goals such a strategy should have, what the central enablers and appropriate framework conditions for the development and application of Distributed Ledger technologies such as blockchain can be in Germany, and what role the state plays in promoting the technology and managing risks in this technology field. Sarah Basic and André Eid (Federal Ministry for Economic Affairs and Energy), Dr. Christian Hampel (Ernst & Young GmbH), Dr. Jürgen Kohr (Fujitsu), Dr. Manfred Lochter (Federal Office for Security in Information Technology) and Kai Wagner (Jolocom) gave input speeches to the debate. Based on the workshop discussion, this paper outlines requirements for a national blockchain strategy. [Die Bundesregierung hat sich in ihrem Koalitionsvertrag das Ziel gesetzt, in dieser Legislaturperiode eine „Blockchain-Strategie“ zu verabschieden. Im Rahmen der geplanten Förderung von Distributed Ledger und Blockchain Technologien sollen die Rahmenbedingungen für Entwicklung und Einsatz der Technologien verbessert und diese auch in der öffentlichen Verwaltung erprobt werden. Mit der Erarbeitung der Strategie sind federführend das Bundesministerium für Wirtschaft und Energie (BMWi) und das Bundesministerium der Finanzen (BMF) betraut. Aus diesem Anlass erörterten in einem Workshop am 3. Juli 2018 am Digital Society Institute der ESMT Berlin 35 Experten aus Politik, Wirtschaft und Wissenschaft, wie eine nationale Blockchain-Strategie praktisch organisiert sein kann. Im Zentrum der Diskussion standen die Fragen, welche Ziele eine solche Strategie haben sollte, was zentrale Ermöglicher und geeignete Rahmenbedingungen für die Entwicklung und Anwendung von Distributed Ledger Technologien wie Blockchain in Deutschland sein können, und welche Rolle dem Staat bei der Förderung und Bekämpfung von Risiken in diesem Technologiefeld zukommt. Impulsvorträge für die Diskussion hielten Sarah Basic und André Eid (Bundesministerium für Wirtschaft und Energie), Dr. Christian Hampel (Ernst & Young GmbH), Dr. Jürgen Kohr (Fujitsu), Dr. Manfred Lochter (Bundesamt für Sicherheit in der Informationstechnik) und Kai Wagner (Jolocom). Auf der Grundlage der Workshop-Diskussion skizziert dieses Papier Anforderungen an eine nationale Blockchain-Strategie.]

Book review of Paul Voigt, “IT-Sicherheitsrecht”, (IT security law), 2018

We propose a two-fold explanation, based on self-related uncertainty, to explain why individuals with antisocial personalities may be more likely to attain leadership positions in the upper echelons of organizations. First, in three experiments (Ns = 141, 238, and 602), we showed that individuals who score high on the dark triad of personality (i.e. psychopathy, narcissism and Machiavellianism) react to the distress associated with self-related uncertainty through enhanced hostility against others, which in turn increases their motivation to lead. Second, in two correlational studies (Ns = 58 and 87) and one experiment (N = 180), we found that hypothetical and actual leaders with psychopathic traits are more likely to be supported by individuals who feel uncertain about their own sense of self. Together, our results provide evidence of the significant role played by self-uncertainty in explaining why and when dark triad individuals are able to attain leadership positions. We discuss implications for theory and research on the dark triad, leadership, and identity, and their relevance for understanding both organizational and public leadership.

With permission of the Academy of Management