Andrej Gill

Professor for Corporate Finance

Johannes Gutenberg University Mainz

PhD Economics, Goethe University Frankfurt, 2013

Diploma Business Administration, Goethe University Frankfurt, 2007

Mainz Faculty of Economics and Business 

Chair for Corporate Finance

SAFE - Sustainable Architecture for Finance in Europe

Frankfurt Laboratory for Experimental Economic Research (FLEX)

Center for Leadership and Behavior in Organizations

LinkedIn

Publications

Gill, Andrej, Heller, David and Nina Michel "Enabling or Accelerating? The Timing of Innovation and The Different Roles of Venture Capitalists", 

Research Policy, Vol. 53, 2024

Venture capitalists (VCs) shape innovative activities, moving beyond the role of providing financial resources. This paper investigates the role of VCs in firms’ innovative performance regarding two mutually exclusive concepts in which they enable or accelerate the patenting activities, distinguishing previously patenting and non-patenting portfolio firms, respectively. To reveal underlying mechanisms, the analyses explore differences in the timing of patenting activities and the level of VC involvement using large-scale VC and firm-level data. We find a positive and persistent enabling effect, suggesting that VCs push for rapid commercialization of inventive ideas by previously non-patenting firms. While we find no accelerating effect on average, high investor involvement and reputable VCs can accelerate the innovative activity of patenting firms by fostering new ideas. Examining firm-level differences in prior patenting experience shows that some target firms only obtain financial support, while others additionally seek active investor involvement that compensates for their need for expert knowledge. Overall, these findings disclose new and differentiated perspectives on the role of VCs in stimulating the inventive capabilities of their portfolio firms.

Gill, Andrej and David Heller. "Leveraging intellectual property: The value of harmonized enforcement regimes", 

Journal of Banking and Finance, Volume 163, June 2024

This paper examines the role of intellectual property (IP) law as a determinant for external debt financing of innovative firms. For identification, we exploit exogenous variation in patent right enforcement arising from the 2004 EU Enforcement Directive. This major policy reform strengthened IP rights and, thus, raised patent owners' asset position. We find that patenting firms significantly increase their use of debt and benefit from lower interest rates in response to the amendment, especially if they own valuable patent portfolios. These effects are most pronounced for relatively small and financially constrained firms, emphasizing the importance of the legal framework in fostering debt financing activities of innovation-oriented firms.

Eufinger, Christian, Gill, Andrej and Florian Hett. "Central Bank Policy and Firm Behavior: Evidence from the Swiss Franc Shock", 

Journal of International Business Studies, 2024

Our study examines the influence of the local financial conditions in a multinational corporation’s (MNC) home country on its global strategy and market position. Establishing a headquarters in a country grants legitimacy with local stakeholders, which enhances firms’ access to local capital markets. Consequently, MNCs headquartered in a country with favorable financial conditions might gain an advantage over MNCs based in countries with a less advantageous financial environment. To analyze this hypothesis, we utilize local projections and a major policy shift by the Swiss National Bank in January 2015, which involved an exchange rate shock and a substantial interest rate cut to −0.75%. Our analysis shows that Swiss-based MNCs, benefiting from lower domestic interest rates, significantly outperformed their EU-based rivals in terms of investment rates (8.4–9.7% points higher) and employment growth (6.7–9.8% points higher). Moreover, we show that this stimulating effect helped to offset the adverse consequences of the simultaneous appreciation of the domestic currency for Swiss-based MNCs in sectors more reliant on exports. Our results highlight the critical role of local financial conditions and, more broadly, local macroeconomic factors in shaping MNCs’ global strategies and competitive standing.

Bauer, Kevin and Andrej Gill. "Mirror, Mirror on the Wall: Algorithmic Assessments, Transparency, and Self-fulfilling Prophecies", 

Information Systems Research, Volume 35, No. 1, 2023

There are growing efforts of data privacy advocates and regulators to provide individuals with a right to explanation about the nature and use of algorithmic assessments that concern them. While desirable from an accountability, contestability, and bias safeguarding point of view, psychological and economic theories suggest that unintended behavioral side effects may occur. This paper puts these theories to the test. We use a series of controlled, incentivized investment games that vary investors’ and recipients’ access to an algorithmic assessment recipients’ likelihood to pay back an investment. Our results show that for erroneous algorithmic assessments, transparency can trigger self-fulfilling prophecies, causally changing assessed individuals’ behavior. Privately learning about being incorrectly categorized by an algorithm steers recipients’ behavior in the direction of the assessment. Becoming aware that an investor has disregarded an incorrect no-repayment assessment additionally reduces repayment. The results demonstrate that the introduction of algorithmic transparency creates a novel, unintended channel through which the use of (inaccurate) algorithms may have important side effects. Specifically, we provide evidence that algorithmic transparency enables algorithms to alter concerned individuals’ beliefs about what kind of person they are and what others expect of them.

Gill, Andrej, Heinz, Matthias, Schumacher, Heiner and Matthias Sutter. "Social Preferences of Young Professionals and the Financial Industry", 

Management Science, Volume 69, Issue 7, 2023

Trust is an important element of many financial transactions. Yet, the financial industry has been struggling with public mistrust. One explanation for this could be the selection of individuals who wish to work in and get job offers from the financial industry. In this paper, we examine the selection into the financial industry based on social preferences. We identify the social preferences of business and economics students, and, for more than six years, follow up on their early career choices as well as on their job placement after graduation. Students eager to work in the financial industry behave in a substantially less trustworthy manner and show less willingness to cooperate than those with other career plans. The job market does not alleviate this selection. Those subjects who find their first permanent job in finance behave in significantly less trustworthy manner in a trust game than those working in other industries. 

Eufinger, Christian and Andrej Gill. "Incentive-Based Capital Requirements" 

Management Science, Volume 63, Issue 12, 2017

This paper proposes a new regulatory approach that implements capital requirements contingent on executive incentive schemes. We argue that excessive risk-taking in the financial sector originates from the shareholder moral hazard created by government guarantees rather than from corporate governance failures within banks. The idea behind the proposed regulatory approach is thus that the more the compensation structure decouples bank managers' interests from those of shareholders by curbing risk-taking incentives, the higher the leverage the bank is permitted to take on. Consequently, the risk-shifting incentives caused by government guarantees and the risk-mitigating incentives created by the compensation structure offset each other, such that the manager chooses the socially efficient investment policy.

Gill, Andrej and Uwe Walz. "Are VC-backed IPOs delayed Trade Sales?"

Journal of Corporate Finance, Volume 37, April 2016

We investigate the role of venture-backing at the time of the initial public offering for the decision to subsequently be taken over and leave the exchange. We show, controlling for firm characteristics as well as the endogeneity of the involvement of VC, that VC-backed firms are significantly more likely to leave the exchange in the course of a take over. Our analysis sheds new light on decisions to go private, and even more so on the process of going public for VC-backed firms. Our findings suggest that, in a significant number of cases, VC-backed IPOs can be interpreted as delayed trade sales. 

Gill, Andrej and Nikolai Visnjic. "Performance Benefits of Tight Control" 

Journal of Private Equity (2015), Volume 18, Number 3

This study investigates the transition from being a listed company with a dispersed ownership structure to being a privately held company with a concentrated ownership structure. We consider a sample of private equity backed portfolio companies to evaluate the consequences of the corporate governance changes on operational performance. Our analysis shows significant positive abnormal growth in several performance ratios for the private period of our sample companies relative to comparable public companies. These performance differences come from the increase in ownership concentration after the leveraged buyout transaction.

Working Papers

Gill, Andrej, Hett, Florian and Johannes Tischer. "Time-Inconsistency and Households' Financial Mistakes: Evidence

from Bank Transaction and Behavioral Measurement Data", R&R Journal of Finance

Households regularly fail to make optimal financial decisions. But what are the underlying reasons for this? Using two conceptually distinct measures of individual time inconsistency, one based on bank account transaction data and one based on behavioral measurement experiments, we show that the excessive use of bank account overdrafts is linked to time inconsistency. By contrast, there is no correlation between a survey-based measure of financial literacy and overdraft usage. Our results indicate that consumer education and information may not substantially improve households' financial decision-making. Rather, behaviorally motivated interventions targeting specific biases in decision-making might qualify as effective policy tools.

Work in Progress

Braun, Fabian, Gill, Andrej and Florian Hett "Experimental evidence on socially responsible investment – the role of preferences and information"

Gill, Andrej and Christine Laudenbach "Algorithm Bias and Investment Behavior"

Gill, Andrej, Florian Hett, Christine Laudenbach, Lena Liebich and Stephan Siegel "The importance of personalized communication for financial behavior"

Bauer, Kevin, Eufinger, Christian and Andrej Gill "The Impact of the COVID-19 crisis on the provision of trade credit"

Dietsch, Marius, Gill, Andrej and Florian Hett "Financial Education via Gamification: Evidence from a Largescale Field Trial"

Gill, Andrej and Michael Kosfeld. "Are Apple Users charged higher Prices?"

Gill, Andrej. "Don't you remember...? Cognitive Memory and Strategic Behavior"

Other Publications

Andrej Gill. "Aktuelle Entwicklungen und Ausblick in die Zukunft der individuellen Finanzplanung und des Forderungsmanagements"

(Zeitschrift für Forderungsmanagement (2018))

Gill, Andrej, Juranek, Steffen, Lizarazo, Christian, Visnjic, Nikolai and Uwe Walz. "Anreize, systematische Risiken und Intransparenz. Lehren aus der Finanz- und Staatsschuldenkrise"

(Studie im Auftrag des Bundesministeriums für Bildung und Forschung, Center for Financial Studies Working Paper, 2013/01)

Cumming, Douglas, Gill, Andrej and Uwe Walz. "Valuation and Financial Disclosure in the Private Equity Industry" 

(Northwestern Journal of International Law and Business (2009), Volume 29, Number 3)