Evidence-based Support for Adaptation Policies in Emerging Economies
Maximilian Banning, Anett Großmann, Katja Heinisch, Frank Hohmann, Christian Lutz, Christoph Schult
IWH Studies,
No. 2,
2023
Abstract
In recent years, the impacts of climate change become increasingly evident, both in magnitude and frequency. The design and implementation of adequate climate adaptation policies play an important role in the macroeconomic policy discourse to assess the impact of climate change on regional and sectoral economic growth. We propose different modelling approaches to quantify the socio-economic impacts of climate change and design specific adaptations in three emerging market economies (Kazakhstan, Georgia and Vietnam) which belong to the areas that are heavily exposed to climate change. A Dynamic General Equilibrium (DGE) model has been used for Vietnam and economy-energy-emission (E3) models for the other two countries. Our modelling results show how different climate hazards impact the economy up to the year 2050. Adaptation measures in particular in the agricultural sector have positive implications for the gross domestic product (GDP). However, some adaptation measures can even increase greenhouse gas emissions. In addition, the focus on GDP as the main indicator to evaluate policy measures can produce welfare-reducing policy decisions.
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The Impact of Lowering Carbon Emissions on Corporate Labour Investment: A Quasi-Natural Experiment
June Cao, Iftekhar Hasan, Wenwen Li
Energy Economics,
May
2023
Abstract
We examine the impact of low-carbon city (LCC) initiatives on labour investment decisions (quantity, quality, and well-being). Using a time-varying difference-in-differences approach based on staggered implementations of such a pilot program, we report an inefficient outcome - absolute deviation of labour investment from the optimal net hiring – especially for firms in labour-intensive industries and firms with high financial slack or adjustment costs. We, however, observe increased investments in highly skilled personnel and compensated with employee stock ownership, especially by firms under intense pressure to reduce carbon emissions. Such initiatives are also closely associated with the significant enhancement of workplace safety. Overall, LCC helps to upgrade the corporate labour structure by hiring more skilled employees through reduced agency problems and heightened green innovation.
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Males Should Mail? Gender Discrimination in Access to Childcare
Henning Hermes, Philipp Lergetporer, Fabian Mierisch, Frauke Peter, Simon Wiederhold
American Economic Association Papers and Proceedings,
May
2023
Abstract
This study investigates discrimination against women when searching and applying for childcare in a nationwide field experiment. We send emails from fictitious parents to 9,313 childcare centers in Germany inquiring about access to childcare. We randomize whether the email is sent by the child's mother or father. Our results show that women receive shorter and less positive responses than men. The probability of receiving a response does not differ by gender, highlighting the importance of going beyond response rates to detect discrimination. We provide suggestive evidence that regional differences in gender discrimination are related to gender norms.
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Cultural Values of Parent Bank Board Members and Lending by Foreign Subsidiaries: The Moderating Role of Personal Traits
Iftekhar Hasan, Krzysztof Jackowicz, Oskar Kowalewski, Łukasz Kozłowski
Journal of International Financial Markets, Institutions and Money,
March
2023
Abstract
In this study, we investigate whether the cultural values of a parent bank’s board members affect lending by the bank’s foreign subsidiaries and how this influence is moderated by the board members’ personal traits. Using a new dataset on foreign-owned banks and their parent companies, we find that average individualism, uncertainty avoidance, and indulgence within parent bank boards significantly impact lending by foreign subsidiaries. We establish that different sensitivities of female and male directors modify the relevance of individual cultural dimensions in lending by foreign bank subsidiaries. Moreover, we show that parent bank directors’ cultural values have a stronger impact on lending by the bank’s foreign subsidiaries when those directors have enough time to fulfill their duties and possess higher ownership stakes in the parent companies.
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Evidence-based Support for Adaptation Policies in Emerging Economies
Maximilian Banning, Anett Großmann, Katja Heinisch, Frank Hohmann, Christian Lutz, Christoph Schult
Low Carbon Economy,
No. 1,
2023
Abstract
Climate change is increasingly evident, and the design of effective climate adaptation policies is important for regional and sectoral economic growth. We propose different modelling approaches to quantify the socio-economic impacts of climate change on three vulnerable countries (Kazakhstan, Georgia, and Vietnam) and design specific adaptations. We use a Dynamic General Equilibrium (DGE) model for Vietnam and an economy-energy-emission (E3) model for the other two countries. Our simulations until 2050 show that selected adaptation measures, in particular in the agricultural sector, have positive implications for GDP. However, some adaptation measures can even increase greenhouse gas emissions. Focusing on GDP alone can lead to welfare-reducing policy decisions.
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The Value of Early-Career Skills
Christina Langer, Simon Wiederhold
CESifo Working Paper,
No. 10288,
2023
Abstract
We develop novel measures of early-career skills that are more detailed, comprehensive, and labor-market-relevant than existing skill proxies. We exploit that skill requirements of apprenticeships in Germany are codified in state-approved, nationally standardized apprenticeship plans. These plans provide more than 13,000 different skills and the exact duration of learning each skill. Following workers over their careers in administrative data, we find that cognitive, social, and digital skills acquired during apprenticeship are highly – yet differently – rewarded. We also document rising returns to digital and social skills since the 1990s, with a more moderate increase in returns to cognitive skills.
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Employment Effects of Investment Grants and Firm Heterogeneity – Evidence from a Staggered Adoption Approach
Eva Dettmann, Mirko Titze, Antje Weyh
IWH Discussion Papers,
No. 6,
2023
Abstract
This study estimates the establishment-level employment effects of investment grants in Germany. In addition to the average treatment effect for the treated, we focus on discrimination in the funding rules as potential source of effect heterogeneity. We combine the difference-in-differences approach of Callaway and Sant’Anna (2021) that explicitly models variation in treatment timing with a ties matching at the cohort level. We observe a positive effect of investment grants on employment development in the full sample. The subsample analysis yields strong evidence for effect heterogeneity due to firm characteristics and the economic environment.
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The Impact of Delay: Evidence from Formal out-of-Court Restructuring
Stjepan Srhoj, Dejan Kovač, Jacob N. Shapiro, Randall K. Filer
Journal of Corporate Finance,
February
2023
Abstract
Different types of bankruptcy restructuring procedures are used in most legal systems to decide the fate of businesses facing financial hardship. We study how bargaining failures in an under-researched type of restructuring procedure, a formal out-of-the court procedure impacts the economic performance of participating firms. Croatia introduced a “pre-bankruptcy settlement” (PBS) process in the wake of the Great Recession of 2007–2009. A novel dataset provides us with annual financial statements for both sides of more than 180,000 debtor–creditor pairs, enabling us to address selection into failed negotiations by matching a rich set of creditor and debtor characteristics. Failures to settle at the PBS stage due to idiosyncratic bargaining problems, which effectively delay entry into the standard bankruptcy procedure, lead to a lower rate of survival among debtors as well as reduced employment, revenue, and profits. We are the first study to track how bargaining failures diffuse through the network of creditors, finding a significant negative effect on small creditors, but not others. Our results highlight the impact of delay and the importance of structuring bankruptcy procedures, to rapidly resolve uncertainty about firms’ future prospects.
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Oxytocin, Empathy, Altruism and Charitable Giving: Experimental Evidence from Blood Donations
Irena Jukić, Dejan Kovač, Danijela Vuletić Čugalj
IWH Discussion Papers,
No. 4,
2023
Abstract
We conducted a field experiment in the natural setting of blood donations to test how oxytocin relates to empathy and altruism. We randomly assigned blood donors in the Croatian Institute for Transfusion Medicine to three groups with the aim to induce different levels of empathy by showing a neutral video to the donors from the control group and an emotional to the donors from the first and second treatment groups. In addition to watching the emotional video, donors from the second treatment group are given a gift which relates to the emotional story from the video. We find no effect of our treatment on induced levels of oxytocin. Null effects of our treatments could be explained by the above average baseline levels of oxytocin and inability of our treatments to provoke emotional stimuli in blood donors. Nonetheless, for our empathy measures we find the effect of gift exchange on empathic concerns, but not on perspective taking. After our experimental treatments, we followed the return of our blood donors for a whole year. We find that only variable which consistently predicts return for blood donation in stated period is the number of previous donations. From policy perspective it is an important finding. Especially for hospitals and other blood providers when faced with time and resource constraints.
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The Effect of Bank Failures on Small Business Loans and Income Inequality
Salvador Contreras, Amit Ghosh, Iftekhar Hasan
Journal of Banking and Finance,
January
2023
Abstract
Using variation in the timing and location of branches of failed banks we analyze its effect on income inequality. Employing a difference-in-differences specification we find that bank failures increased the GINI by 0.3 units (or 0.7%). We show that the rise in inequality is due to a decrease in the incomes of the poor that outpaces declines of the rest. We further show that individuals with lower levels of education exhibit a relatively greater decline in real wages and weekly hours worked. Exploring channels of transmission, we find income inequality is explained by a general decline in small business loans. This in turn reduces net new small business formation and their job creation capacity, a sector that hires a substantial share of low-income earners.
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