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Dr Konstantin Wagner

Dr Konstantin Wagner
Current Position

since 3/21

Junior Research Affiliate

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 3/24

Manager

KPMG

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Research Interests
  • financial markets
  • institutional economics
  • corporate finance

Konstantin Wagner joined the institute as a Junior Research Affiliate in March 2021. His research focuses on institutional economics and corporate finance.

Konstantin Wagner is a manager at KPMG. He received his bachelor's degree from Friedrich Schiller University Jena, his master's degree from University of Tübingen, and his PhD from Otto von Guericke University Magdeburg.

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Publications

Compensation Regulation in Banking: Executive Director Behavior and Bank Performance after the EU Bonus Cap

Stefano Colonnello Michael Koetter Konstantin Wagner

in: Journal of Accounting and Economics, No. 1, 2023

Abstract

The regulation that caps executives’ variable compensation, as part of the Capital Requirements Directive IV of 2013, likely affected executive turnover, compensation design, and risk-taking in EU banking. The current study identifies significantly higher average turnover rates but also finds that they are driven by CEOs at poorly performing banks. Banks indemnified their executives by off-setting the bonus cap with higher fixed compensation. Although our evidence is only suggestive, we do not find any reduction in risk-taking at the bank level, one purported aim of the regulation.

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Working Papers

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The Reverse Revolving Door in the Supervision of European Banks

Stefano Colonnello Michael Koetter Alex Sclip Konstantin Wagner

in: IWH Discussion Papers, No. 25, 2023

Abstract

We show that around one third of executive directors on the boards of national supervisory authorities (NSA) in European banking have an employment history in the financial industry. The appointment of executives without a finance background associates with negative valuation effects. Appointments of former bankers, in turn, spark positive stock market reactions. This „proximity premium“ of supervised banks is a more likely driver of positive valuation effects than superior financial expertise or intrinsic skills of former executives from the financial industry. Prior to the inception of the European Single Supervisory Mechanism, the presence of former financial industry executives on the board of NSA associates with lower regulatory capital and faster growth of banks, pointing to a more lenient supervisory style.

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Competition, Cost Structure, and Labour Leverage: Evidence from the U.S. Airline Industry

Konstantin Wagner

in: IWH Discussion Papers, No. 21, 2020

Abstract

I study the effect of increasing competition on financial performance through labour leverage. To capture competition, I exploit variation in product market contestability in the U.S. airline industry. First, I find that increasing competitive pressure leads to increasing labour leverage, proxied by labour share. This explains the decrease in operating profitability through labour rigidities. Second, by exploiting variation in human capital specificity, I show that contestability of product markets induces labour market contestability. Whereas affected firms might experience more stress through higher wages or loss of skilled human capital, more mobile employee groups benefit from competitions through higher labour shares.

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Marginal Returns to Talent for Material Risk Takers in Banking

Moritz Stieglitz Konstantin Wagner

in: IWH Discussion Papers, No. 20, 2020

Abstract

Economies of scale can explain compensation differentials over time, across firms of different size, different hierarchy-levels, and different industries. Consequently, the most talented individuals tend to match with the largest firms in industries where marginal returns to their talent are greatest. We explore a new dimension of this size-pay nexus by showing that marginal returns also differ across activities within firms and industries. Using hand-collected data on managers in European banks well below the level of executive directors, we find that the size-pay nexus is strongest for investment banking business units and for banks with a market-based business model. Thus, managerial compensation is most sensitive to size increases for activities that can easily be scaled up.

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