Do economic incentives govern information diffusion in markets? Using international banks’ advisory activities in corporate takeovers as their source of private information, we show in supervisory data that banks with closer ties to the target, but not the acquirer, advisor trade profitably in the target’s stock prior to the deal announcement. This trading behavior is associated with a higher premium paid by the acquirer without compromising the deal success. As the incentives of informed traders are aligned only with those of the target shareholders, which are represented by the target advisor, our evidence suggests strategic information transmission among these banks.

We study the interaction of expansionary rate-based monetary policy and quantitative easing, despite their concurrent implementation, by exploiting heterogeneous banks and the introduction of negative monetary-policy rates in a fragmented euro area. Quantitative easing increases credit supply less, translating into weaker employment growth, when banks’ funding costs do not decrease. Using administrative data from Germany, we uncover that among banks selling their securities, central-bank reserves remain disproportionately with high-deposit banks that are constrained due to sticky customer deposits at the zero lower bound. Affected German banks lend relatively less to firms while increasing their interbank exposure in the euro area.

Aktuell wird diskutiert, die geringfügige Beschäftigung (Minijobs) stark einzuschränken.¹ Es wird kritisiert, dass Minijobs zur Absenkung arbeitsrechtlicher Standards führen sowie Schwarzarbeit begünstigen und den Wettbewerb verzerren. Darum wird vorgeschlagen, die Minijobs schrittweise in reguläre sozialversicherungspflichtige Beschäftigungsverhältnisse zu überführen.

We revisit the employer size wage effect (ESWE) – arguably the most basic and influential departure from the law of one price for labor. Our main result is that this canonical fact disappears completely across establishments within the same firm, even though they operate in different local labor markets. We uncover and dissect this fact by including a firm fixed effect in otherwise standard cross-sectional regressions of wages on establishment size. We implement this demanding specification in population-wide triple-linked firm-establishment-employee data in Germany. This result is new in the ESWE literature (for which our paper also provides the first systematic meta-analysis). This wage-size decoupling is hard to square with the view that employment is determined along a finitely elastic employerspecific labor supply curve – i.e., employers pay exactly the minimum needed for the quantity of labor, but no more – the foundation of the monopsony view. By contrast, large multi-establishment firms (MEF) appear to hire off their labor supply curves (or those curves are very elastic), pay wage premia above the monopsonistic minimum, and leave excess labor supply. We find some evidence for a reemergence of the ESWE within low-premium MEFs. Overall, at least for the 25% of German employment in large firms for which the ESWE disappears, wage setting and employment determination may be better accounted for by alternative models, namely accommodating above-market-clearing wage premia and rationing of labor supply, such as efficiency wage theories.

More individualistic countries experience higher economic growth. We provide evidence for a human-capital-based explanation of the growth effects of individualism. Using data from the largest international adult skill assessment, we establish that individualism shapes human capital formation. We identify the effects of individualism by exploiting variation between migrants at the origin-country, origin-language, and person level. Migrants from more individualistic cultures have higher cognitive skills and larger skill gains over time. They also invest more in their skills over the life cycle, as they acquire more years of schooling and are more likely to participate in adult education activities. Individualism is more important in explaining adult skill formation than any other cultural trait that previous literature has emphasized. In the labor market, more individualistic migrants earn higher wages and are less often unemployed. We show that our results cannot be explained by selective migration or omitted origin-country variables.