25 Years IWH

Professor Dr Felix Noth

Professor Dr Felix Noth
Current Position

since 10/16

Deputy Head of the Department of Financial Markets

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

since 3/14

Head of the Research Group Real and Financial Innovation

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

since 3/14

Assistant Professor for Banking and Financial Systems

Otto von Guericke University Magdeburg

Research Interests

  • banking markets and real sector growth
  • banking regulation and risk-taking of banks
  • natural disasters and consequences for banks and banking markets

Since March 1, 2014, Felix Noth is the coordinator of the Research Group "Real and Financial Innovation" at the Halle Institute for Economic Research (IWH) and is Assistant Professor for Banking and Financial Systems at Otto von Guericke University Magdeburg.

From 2003 to 2007, Felix Noth studied economics at Ludwig-Maximilians-University Munich before joining the faculty at Goethe-University Frankfurt am Main for his dissertation on "Financial Intermediation and its Consequences for the Real Economy". He finished his doctoral thesis in June 2011 and stayed as a PostDoc at Goethe-University till February 2014.

Your contact

Professor Dr Felix Noth
Professor Dr Felix Noth
Mitglied - Department Financial Markets
Send Message +49 345 7753-702

Publications

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Financial Constraints of Private Firms and Bank Lending Behavior

P. Behr L. Norden Felix Noth

in: Journal of Banking & Finance , No. 9, 2013

Abstract

We investigate whether and how financial constraints of private firms depend on bank lending behavior. Bank lending behavior, especially its scale, scope and timing, is largely driven by bank business models which differ between privately owned and state-owned banks. Using a unique dataset on private small and medium-sized enterprises (SMEs) we find that an increase in relative borrowings from local state-owned banks significantly reduces firms’ financial constraints, while there is no such effect for privately owned banks. Improved credit availability and private information production are the main channels that explain our result. We also show that the lending behavior of local state-owned banks can be sustainable because it is less cyclical and neither leads to more risk taking nor underperformance.

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Why Do Banks Provide Leasing?

D. Bülbül Felix Noth M. Tyrell

in: Journal of Financial Services Research , No. 2, 2014

Abstract

Banks are engaging in leasing activities at an increasing rate, which is demonstrated by aggregated data for both European and U.S. banking companies. However, little is known about leasing activities at the bank level. The contribution of this paper is the introduction of the nexus of leasing in banking. Beginning from an institutional basis, this paper describes the key features of banks’ leasing activities using the example of German regional banks. The banks in this sample can choose from different types of leasing contracts, providing the banks with a degree of leeway in conducting business with their clients. We find a robust and significant positive impact of banks’ leasing activities on their profitability. Specifically, the beneficial effect of leasing stems from commission business in which the bank acts as a middleman and is not affected by the potential defaults of customers.

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Bank Market Power, Factor Reallocation, and Aggregate Growth

R. Inklaar Michael Koetter Felix Noth

in: Journal of Financial Stability , 2015

Abstract

Using a unique firm-level sample of approximately 700,000 firm-year observations of German small and medium-sized enterprises (SMEs), this study seeks to identify the effect of bank market power on aggregate growth components. We test for a pre-crisis sample whether bank market power spurs or hinders the reallocation of resources across informationally opaque firms. Identification relies on the dependence on external finance in each industry and the regional demarcation of regional banking markets in Germany. The results show that bank markups spur aggregate SME growth, primarily through technical change and the reallocation of resources. Banks seem to need sufficient markups to generate the necessary private information to allocate financial funds efficiently.

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Working Papers

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Bank-specific Shocks and House Price Growth in the U.S.

F. Bremus Thomas Krause Felix Noth

in: IWH Discussion Papers , No. 3, 2017

Abstract

This paper investigates the link between mortgage supply shocks at the banklevel and regional house price growth in the U.S. using micro-level data on mortgage markets from the Home Mortgage Disclosure Act for the 1990-2014 period. Our results suggest that bank-specific mortgage supply shocks indeed affect house price growth at the regional level. The larger the idiosyncratic shocks to newly issued mortgages, the stronger is house price growth. We show that the positive link between idiosyncratic mortgage shocks and regional house price growth is very robust and economically meaningful, however not very persistent since it fades out after two years.

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Financial Transaction Taxes: Announcement Effects, Short-run Effects, and Long-run Effects

Sebastian Eichfelder Mona Lau Felix Noth

in: IWH Discussion Papers , No. 4, 2017

Abstract

We analyze the impact of the French 2012 financial transaction tax (FTT) on trading volumes, stock prices, liquidity, and volatility. We extend the empirical research by identifying FTT announcement and short-run treatment effects, which can distort difference-in-differences estimates. In addition, we consider long-run volatility measures that better fit the French FTT’s legislative design. While we find strong evidence of a positive FTT announcement effect on trading volumes, there is almost no statistically significant evidence of a long-run treatment effect. Thus, evidence of a strong reduction of trading volumes resulting from the French FTT might be driven by announcement effects and short-term treatment effects. We find evidence of an increase of intraday volatilities in the announcement period and a significant reduction of weekly and monthly volatilities in the treatment period. Our findings support theoretical considerations suggesting a stabilizing impact of FTTs on financial markets.

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Banking Globalization, Local Lending, and Labor Market Effects: Micro-level Evidence from Brazil

Felix Noth Matias Ossandon Busch

in: IWH Discussion Papers , No. 7, 2017

Abstract

This paper estimates the effect of a foreign funding shock to banks in Brazil after the collapse of Lehman Brothers in September 2008. Our robust results show that bank-specific shocks to Brazilian parent banks negatively affected lending by their individual branches and trigger real economic consequences in Brazilian municipalities: More affected regions face restrictions in aggregated credit and show weaker labor market performance in the aftermath which documents the transmission mechanism of the global financial crisis to local labor markets in emerging countries. The results represent relevant information for regulators concerned with the real effects of cross-border liquidity shocks.

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