Karol Kempa

About Me


  • Task-specific human capital and returns to specialization: evidence from association football
    Oxford Economic Papers, 2021.
    | Publication | Free-access article link

    "This paper analyses returns to task specialization using a unique panel data set of professional football players in the German Bundesliga. Based on accumulated task-specific human capital, I measure whether a player is rather a specialist in one task or a generalist able to perform several tasks. Using OLS, fixed effects, and quantile regression methods (with individual fixed effects), I analyse the impact of specialization on remuneration. Differentiating by player role in team production, I find that core team members, i.e. starting players, exhibit positive returns to specialization, which increase at higher salary quantiles. In contrast, substitutes, in particular those in the lower half of the conditional salary distribution, seem to benefit from being generalists, which renders them more attractive as substitute players for their teams. The paper discusses implications of the findings for other labour market contexts."

  • The cost of debt of renewable and non-renewable energy firms (with Ulf Moslener and Oliver Schenker)
    Nature Energy 6, 135-142, 2021.
    | Publication | View-only Version (free access)

    "The risks imminent to younger technologies and markets may hinder renewable energy firms’ access to financing. This could curtail the investment needed for the transformation of the global energy sector. However, comprehensive analyses of the cost of debt of renewable and non-renewable energy firms are lacking. Here, we empirically analyse the differences between the costs of debt of firms developing and producing renewable energy technologies and of non-renewable energy firms. We use global micro-level data on individual loans matched to firm-level data. The results suggest that renewable energy firms might face a higher cost of debt initially, when technologies and markets are young and immature. However, a cost advantage of renewable energy firms emerges over time. The results also show that the costs of debt of renewable energy firms are lower in economies with a more developed banking sector and comparatively stringent environmental policies."

The paper received the CCSI | GRASFI 2020 Best Paper Prize for Research on the Role of the State in Sustainable Fininance.

  • If a Measure Becomes a Target: How Maximizing Mobilized Private Climate Finance May Backfire (with Ulf Moslener) Zeitschrift für Umweltpolitik und Umweltrecht / Journal of Environmental Law and Policy 43(1), 26-40, 2020.
    | Publication |

    "The developed country Parties to the UNFCCC collectively committed themselves tojointly mobilize USD 100 billion a year for climate-related activities by 2020 to address the needs of developing countries. The lack of a clear meaning of “mobilising” has triggered a vivid academic and political debate about the definition and measurement of mobilised private climate finance. On the one hand, there is a need for an adequate and practical system in order to monitor the developed countries’ progress to the commitment. On the other hand, the current debate shows how conceptually and practically challenging the tracking of mobilised private finance is. This article summarizes and discusses the current state of the debate on methodological approaches and first estimations. In particular, we critically assess the debate from a more fundamental perspective that did not receive sufficient attention, namely the incentives of all involved climate-finance actors: In order to achieve the “below-2°C” target, substantial investments are required worldwide. These investments will have to rely largely on private sources. We argue that incentives for private investments leading to a transition to a low-carbon economy should be a central aspect in the debate. We suggest that current incentives may be flawed and discuss options for practical tracking systems that include these incentives."

  • Reporting errors and biases in published empirical findings: Evidence from innovation research (with Stephan B. Bruns, Igor Asanov, Rasmus Bode, Melanie Dunger, Christoph Funk, Sherif M. Hassan, Julia Hauschildt, Dominik Heinisch, Johannes König, Johannes Lips, Matthias Verbeck, Eva Wolfschütz, and Guido Buenstorf)
    Research Policy 48(9), 103796, 2019.
    | Publication |

    "Errors and biases in published results compromise the reliability of empirical research, posing threats to the cumulative research process and to evidence-based decision making. We provide evidence on reporting errors and biases in innovation research. We find that 45% of the articles in our sample contain at least one result for which the provided statistical information is not consistent with reported significance levels. In 25% of the articles, at least one strong reporting error is diagnosed where a statistically non-significant finding becomes significant or vice versa using the common significance threshold of 0.1. The error rate at the test level is very small with 4.0% exhibiting any error and 1.4% showing strong errors. We also find systematically more marginally significant findings compared to marginally non-significant findings at the 0.05 and 0.1 thresholds of statistical significance. These discontinuities indicate the presence of reporting biases. Explorative analysis suggests that discontinuities are related to authors’ affiliations and to a lesser extent the article’s rank in the issue and the style of reporting."

  • Dissent, Sabotage, and Leader Behaviour in Contests: Evidence from European Football (with Hannes Rusch)
    Managerial and Decision Economics 40(5), 500-514, 2019.
    | Publication | Working Paper (Older Version) |

    "This paper provides an empirical investigation of misconducts in contests based on data from European football. We extend previous studies by differentiating between dissents with the referee and misconducts directly aimed at sabotaging the competitor. We find that sabotage is more likely committed by teams with lower ability. Dissent is more likely to be shown by teams lagging behind in score and by away teams. We further find that captains engage more in sabotage during important matches and challenge referees' decisions immediately after sanctions of teammates. Finally, we also observe a deterrence effect of sanctions on all types of misconduct."

  • Directed Technical Change and Energy Intensity Dynamics: Structural Change vs. Energy Efficiency (with Christian Haas)
    Energy Journal 39(4), 127-151, 2018.
    | Publication | PDF (Accepted Version) |

    "This paper uses a model with Directed Technical Change to theoretically analyse observable heterogeneous energy intensity developments. Based on the empirical evidence, we decompose changes in aggregate energy intensity into structural changes in the economy (structural effect) and within-sector energy efficiency improvements (efficiency effect). The relative importance of these effects is determined by energy price growth and sectoral productivities that drive the direction of technical change. When research is directed to the labour-intensive sector, the structural effect is the main driver of energy intensity dynamics. In contrast, the efficiency effect dominates energy intensity developments, when research is directed to energy-intensive industries. Increasing energy price generally leads to lower energy intensities and temporal energy price shocks might induce a permanent redirection of innovation activities. We calibrate the model to empirical data and simulate energy intensity developments across countries. The results of our very stylised model are largely consistent with empirical evidence."

  • Climate Policy with the Chequebook – An Economic Analysis of Climate Investment Support (with Ulf Moslener)
    Economics of Energy & Environmental Policy 6(1), 111-129, 2017.
    | Publication | PDF |

    "Across the globe, climate policy is increasingly using investment support instruments, such as grants, concessional loans, and guarantees - whereas carbon prices are losing importance. This development substantially increases the risk of inefficient public spending. In this paper, we examine the ability of finance instruments to effectively and efficiently address market failures related to clean energy investments. We characterise these market imperfections - emission externalities, knowledge spillovers and capital market imperfections - and identify their negative impacts on the investor-relevant risk-return characteristics. We argue that finance instruments are able to address the effects of these market failures. However, a carbon price is superior in internalising the emission externalities. With respect to the latter two inefficiencies, investment support instruments can effectively compensate the market failures if designed appropriately. We further provide policy recommendations on the choice of finance instruments to address the various market failures and guidance on how to use these instruments avoiding inefficient government spending."

Working Papers & Current Projects

  • Low-Carbon Investment and Credit Rationing (with Christian Haas)
    | Working Paper |

    "This paper offers a novel theoretical approach to analyse the impacts of emission externalities and credit market failures on low-carbon investments. We use a principal-agent model with information asymmetries between borrowing firms and lenders. Firms can choose between a carbon-intensive technology and a low-carbon technology requiring an externally funded initial investment. We find that an emission tax alone is not sufficient to achieve the first-best outcome if the low-carbon technology is immature and risky and thus results in credit rationing. Combining the emission tax with interest subsidies or loan guarantees can eliminate credit rationing. If a carbon price is (politically) not feasible, intervention on the credit market alone can promote low-carbon development. However, such a policy yields a second-best outcome. Our dynamic analysis shows that any intervention on credit markets is finite, as knowledge spillovers reduce the risk of low-carbon technologies. Without such intervention, there are social costs of delay."

  • Environmental Externalities and Corporate Bond Spreads (with Ulf Moslener)

  • Greening the COVID-19 Economic Recovery (with Ashish Tyagi)

  • Oil Price Shocks and Cost of Debt – Evidence from U.S. Oil Firms (with Christoph Funk and Johannes Lips)

  • Task-Specific Human Capital and Labour Productivity (with Sebastian Krügel)


Frankfurt School of Finance & Management

  • Applied Research Methodology (BSc)

Justus-Liebig University Giessen

  • Theory of International Trade (MSc),

  • Trade Policy and International Factor Movements (MSc),

  • Microeconomics II (BSc),

  • Seminar in Economics (BSc)

University of Wisconsin - Milwaukee

  • Principles of Microeconomics (BSc)


Frankfurt School of Finance & Management gGmbH
Adickesallee 32-34, 60332 Frankfurt am Main
Email: k.kempa@fs.de
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