Cultural Norms and Corporate Fraud: Evidence from the Volkswagen Scandal
Iftekhar Hasan, Felix Noth, Lena Tonzer
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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Macroeconomic Factors and Microlevel Bank Behavior
Claudia M. Buch, S. Eickmeier, Esteban Prieto
Journal of Money, Credit and Banking,
Nr. 4,
2014
Abstract
We analyze the link between banks and the macroeconomy using a model that extends a macroeconomic VAR for the U.S. with a set of factors summarizing conditions in about 1,500 commercial banks. We investigate how macroeconomic shocks are transmitted to individual banks and obtain the following main findings. Backward-looking risk of a representative bank declines, and bank lending increases following expansionary shocks. Forward-looking risk increases following an expansionary monetary policy shock. There is, however, substantial heterogeneity in the transmission of macroeconomic shocks, which is due to bank size, capitalization, liquidity, risk, and the exposure to real estate and consumer loans.
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Price Competition between an Expert and a Non-Expert
Jan Bouckaert, Hans Degryse
International Journal of Industrial Organization,
Nr. 6,
2000
Abstract
This paper characterizes price competition between an expert and a non-expert. In contrast with the expert, the non-expert's repair technology is not always successful. Consumers visit the expert after experiencing an unsuccessful match at the non-expert. This re-entry affects the behavior of both sellers. For low enough probability of successful repair at the non-expert, all consumers first visit the non-expert, and a 'timid-pricing' equilibrium results. If the non-expert's repair technology performs well enough, it pays for some consumers to disregard the non-expert a visit. They directly go to the expert's shop, and an 'aggressive-pricing' equilibrium pops up. For intermediate values of the non-expert's successful repair a 'mixed-pricing' equilibrium emerges where the expert randomizes over the monopoly price and some lower price.
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