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 Financial System Adaptability and Resilience

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

since 7/20

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

Your contact

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

Publications

Does IFRS Information on Tax Loss Carryforwards and Negative Performance Improve Predictions of Earnings and Cash Flows?

Sandra Dreher Sebastian Eichfelder Felix Noth

in: Journal of Business Economics, January 2024

Abstract

We analyze the usefulness of accounting information on tax loss carryforwards and negative performance to predict earnings and cash flows. We use hand-collected information on tax loss carryforwards and corresponding deferred taxes from the International Financial Reporting Standards tax footnotes for listed firms from Germany. Our out-of-sample tests show that considering accounting information on tax loss carryforwards does not enhance performance forecasts and typically even worsens predictions. The most likely explanation is model overfitting. Besides, common forecasting approaches that deal with negative performance are prone to prediction errors. We provide a simple empirical specification to account for that problem.

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Cultural Norms and Corporate Fraud: Evidence from the Volkswagen Scandal

Iftekhar Hasan Felix Noth Lena Tonzer

in: Journal of Corporate Finance, October 2023

Abstract

We examine a corporate governance role of local culture via its impact on consumer behavior following corporate scandals. Our proxy for culture is the presence of local Protestantism. Exploiting the unexpected nature of the Volkswagen (VW) diesel scandal in September 2015, we show that new registrations of VW cars decline significantly in German counties with a Protestant majority following the VW scandal. Further survey evidence shows that, compared to Catholics, Protestants respond significantly more negatively to fraud but not to environmental issues. Our findings suggest that the enforcement culture in Protestantism facilitates penalizing corporate fraud.

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Natural Disasters and Bank Stability: Evidence from the U.S. Financial System

Felix Noth Ulrich Schüwer

in: Journal of Environmental Economics and Management, May 2023

Abstract

We show that weather-related natural disasters in the United States significantly weaken the financial stability of banks with business activities in affected regions. This is reflected in higher probabilities of default, lower z-scores, higher non-performing assets ratios, higher foreclosure ratios, lower returns on assets and lower equity ratios of affected banks in the years following a natural disaster. The effects are economically relevant and highlight the financial vulnerability of banks and their borrowers despite insurances and public aid programs.

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Working Papers

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Banking Market Deregulation and Mortality Inequality

Iftekhar Hasan Thomas Krause Stefano Manfredonia Felix Noth

in: Bank of Finland Research Discussion Papers, No. 14, 2022

Abstract

This paper shows that local banking market conditions affect mortality rates in the United States. Exploiting the staggered relaxation of branching restrictions in the 1990s across states, we find that banking deregulation decreases local mortality rates. This effect is driven by a decrease in the mortality rate of black residents, implying a decrease in the black-white mortality gap. We further analyze the role of mortgage markets as a transmitter between banking deregulation and mortality and show that households' easier access to finance explains mortality dynamics. We do not find any evidence that our results can be explained by improved labor outcomes.

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A Note on the Use of Syndicated Loan Data

Isabella Müller Felix Noth Lena Tonzer

in: IWH Discussion Papers, No. 17, 2022

Abstract

Syndicated loan data provided by DealScan has become an essential input in banking research over recent years. This data is rich enough to answer urging questions on bank lending, e.g., in the presence of financial shocks or climate change. However, many data options raise the question of how to choose the estimation sample. We employ a standard regression framework analyzing bank lending during the financial crisis to study how conventional but varying usages of DealScan affect the estimates. The key finding is that the direction of coefficients remains relatively robust. However, statistical significance seems to depend on the data and sampling choice.

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Cultural Resilience, Religion, and Economic Recovery: Evidence from the 2005 Hurricane Season

Iftekhar Hasan Stefano Manfredonia Felix Noth

in: IWH Discussion Papers, No. 9, 2021

Abstract

This paper investigates the critical role of religion in the economic recovery after high-impact natural disasters. Exploiting the 2005 hurricane season in the southeast United States, we document that establishments in counties with higher religious adherence rates saw a significantly stronger recovery in terms of productivity for 2005-2010. Our results further suggest that a particular religious denomination does not drive the effect. We observe that different aspects of religion, such as adherence, shared experiences from ancestors, and institutionalised features, all drive the effect on recovery. Our results matter since they underline the importance of cultural characteristics like religion during and after economic crises.

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