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Does Low-pay Persist across Different Regimes? Evidence from the German Unification

André Diegmann, Nicole Gürtzgen
The Economics of Transition, forthcoming
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Finance and Wealth Inequality

Iftekhar Hasan, Roman Horvath, Jan Mares
Journal of International Money and Finance, forthcoming
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Tournament Incentives and Acquisition Performance

Iftekhar Hasan, Marco Navone, Thomas To, Eliza Wu
The Review of Corporate Finance Studies, forthcoming
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Banks’ Equity Performance and the Term Structure of Interest Rates

Elyas Elyasiani, Iftekhar Hasan, Elena Kalotychou, Panos K. Pouliasis, Sotiris Staikouras
Financial Markets, Institutions & Instruments, forthcoming
Abstract
Using an extensive global sample, this paper investigates the impact of the term structure of interest rates on bank equity returns. Decomposing the yield curve to its three constituents (level, slope and curvature), the paper evaluates the time-varying sensitivity of the bank’s equity returns to these constituents by using a diagonal dynamic conditional correlation multivariate GARCH framework. Evidence reveals that the empirical proxies for the three factors explain the variations in equity returns above and beyond the market-wide effect. More specifically, shocks to the long-term (level) and short-term (slope) factors have a statistically significant impact on equity returns, while those on the medium-term (curvature) factor are less clear-cut. Bank size plays an important role in the sense that exposures are higher for SIFIs and large banks compared to medium and small banks. Moreover, banks exhibit greater sensitivities to all risk factors during the crisis and postcrisis periods compared to the pre-crisis period; though these sensitivities do not differ for market-oriented and bank-oriented financial systems.
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Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany

Boris Hirsch, Steffen Müller
ILR Review, forthcoming
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Measuring the Indirect Effects of Adverse Employer Behavior on Worker Productivity – A Field Experiment

Matthias Heinz, Sabrina Jeworrek, Vanessa Mertins, Heiner Schumacher, Matthias Sutter
The Economic Journal, forthcoming
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Tornado Activity, House Price and Stock Returns

Michael Donadelli, Michael Ghisletti, Marcus Jüppner, Antonio Paradiso
The North American Journal of Economics and Finance, forthcoming
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The Influence of Bondholder Concentration and Temporal Orientation on Investments in R&D

Pengfei Ye, Jonathan O’Brien, Christina Matz Carnes, Iftekhar Hasan
Journal of Management, forthcoming
Abstract
Although innovation can be a critical source of competitive advantage, research has found that debt can erode management’s willingness to invest in R&D. In this article, we employ a stakeholder bargaining power perspective to argue that this effect is most pronounced when the firm’s bonds are concentrated in the hands of bond blockholders. Furthermore, we contend that the temporal orientation of bondholders influences this relationship. Specifically, while it is commonly assumed that bondholders have a limited temporal orientation that induces them to focus on short-term value appropriation, we argue that some bond blockholders adopt a long-term temporal orientation. This orientation, in turn, makes them more inclined to support long-term value creation for the firm in the form of enhanced investments in R&D. Moreover, while agency theory suggests that there is an inherent conflict of interest between shareholders and bondholders, our results suggest that the temporal orientation of investors (i.e., both shareholders and bondholders) matters much more than whether they invested in the firm’s equity or its debt.
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The Appropriateness of the Macroeconomic Imbalance Procedure for Central and Eastern European Countries

Geraldine Dany-Knedlik, Martina Kämpfe, Tobias Knedlik
Empirica, forthcoming
Abstract
The European Commission’s Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system. It was published first time in 2012 by the European Commission as a reaction to public debt crises in Europe. So far, the Macroeconomic Imbalance Procedure takes a one-size-fits-all approach with regard to the identification of thresholds. The experience of Central and Eastern European Countries during the global financial crisis and in the resulting public debt crises has been largely different from that of other European countries. This paper looks at the appropriateness of scoreboard of the Macroeconomic Imbalances Procedure of the European Commission for this group of catching-up countries. It is shown that while some of the indicators of the scoreboard are helpful to predict crises in the region, thresholds are in most cases set too narrow since it largely disregarded the specifics of catching-up economies, in particular higher and more volatile growth rates of various macroeconomic variables.
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Banks’ Funding Stress, Lending Supply and Consumption Expenditure

H. Evren Damar, Reint E. Gropp, A. Mordel
Journal of Money, Credit and Banking, forthcoming
Abstract
We employ a unique identification strategy linking survey data on household consumption expenditure to bank‐level data to estimate the effects of bank funding stress on consumer credit and consumption expenditures. We show that households whose banks were more exposed to funding shocks report lower levels of nonmortgage liabilities. This, however, only translates into lower levels of consumption for low‐income households. Hence, adverse credit supply shocks are associated with significant heterogeneous effects.
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