Political Ideology and International Capital Allocation
Journal of Financial Economics,
Does investors’ political ideology shape international capital allocation? We provide evidence from two settings—syndicated corporate loans and equity mutual funds—to show ideological alignment with foreign governments affects the cross-border capital allocation by U.S. institutional investors. Ideological alignment on both economic and social issues plays a role. Our empirical strategy ensures direct economic effects of foreign elections or government ties between countries are not driving the result. Ideological distance between countries also explains variation in bilateral investment. Combined, our findings imply ideological alignment is an important, omitted factor in models of international capital allocation.
IWH Medium-Term Projection The IWH medium-term projection shows: If Germany wants to stick to both its current debt...
People Job Market Candidates Doctoral...
Vocational Training at IWH At the Halle Institute for Economic Research (IWH) the...
Institutions and Corporate Reputation: Evidence from Public Debt Markets
Journal of Business Ethics,
Using data from China’s public debt markets, we study the value of corporate reputation and how it interacts with legal and cultural forces to assure accountability. Exploring lawsuits that change corporate reputation, we find that firms involved in lawsuits experience a decrease in bond values and a tightening of borrowing terms. Using the heterogeneities in legal and social capital environments across Chinese provinces, we find the effects are more pronounced for private firms, firms headquartered in provinces with low legal protections, and firms headquartered in provinces with high social capital. The results show that lawsuits that allege misconduct are associated with reputational penalties and that such penalties serve as substitutes for legal protections and as complements to cultural forces to provide ex post accountability and motivate ex ante trust.
IWH Bankruptcy Research
IWH Bankruptcy Research The Bankruptcy Research Unit of the Halle Institute for...
Postdoctoral Researcher in Labor Economics (f/m/x, 100%) [2024-04]
Vacancy Postdoctoral Researcher in Labor Economics (f/m/x,...
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
PostDoc Position in the Department of Laws, Regulations and Factor Markets (100%) (f/m/x) [2024-02]
Vacancy PostDoc Position (100%) (f/m/x) [2024-02] ...
IWH Alumni The IWH would like to stay in contact with its former employees. We...