Diversity
Diversity We have signed the Diversity Charter and actively commit to a culture of diversity. IWH stands for a working environment that is free of biases and barrier-free: A…
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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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Institutions and Corporate Reputation: Evidence from Public Debt Markets
Xian Gu, Iftekhar Hasan, Haitian Lu
Journal of Business Ethics,
No. 1,
2023
Abstract
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.
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Corporate Culture and Firm Value: Evidence from Crisis
Yiwei Fang, Franco Fiordelisi, Iftekhar Hasan, Woon Sau Leung, Gabriel Wong
Journal of Banking and Finance,
January
2023
Abstract
Based on the Competing Values Framework (CVF), we score 10-K text to measure company culture in four types (collaborative, controlling, competitive, and creative) and examine its role in firm stability. We find that firms with higher controlling culture fared significantly better during the 2008–09 crisis. Firms with stronger controlling culture experienced fewer layoffs, less negative asset growth, greater debt issuance, and increased access to credit-line facilities during the crisis. The positive effect of the controlling culture is stronger among the financially-constrained firms. Overall, the controlling culture improves firm stability through greater support from capital providers.
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The Disciplining Effect of Supervisory Scrutiny in the EU-wide Stress Test
Christoffer Kok, Carola Müller, Steven Ongena, Cosimo Pancaro
Journal of Financial Intermediation,
January
2023
Abstract
Relying on confidential supervisory data related to the 2016 EU-wide stress test, this paper presents novel empirical evidence that supervisory scrutiny associated to stress testing has a disciplining effect on bank risk. We find that banks that participated in the 2016 EU-wide stress test subsequently reduced their credit risk relative to banks that were not part of this exercise. Relying on new metrics for supervisory scrutiny that measure the quantity, potential impact, and duration of interactions between banks and supervisors during the stress test, we find that the disciplining effect is stronger for banks subject to more intrusive supervisory scrutiny during the exercise. We also find that a strong risk management culture is a prerequisite for the supervisory scrutiny to be effective. Finally, we show that a similar disciplining effect is not exerted neither by higher capital charges nor by more transparency and related market discipline induced by the stress test.
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Does Gender Affect Innovation? Evidence from Female Chief Technology Officers
Wassim Dbouk, Iftekhar Hasan, Nada Kobeissi, Qiang Wu, Li Zheng
Research Policy,
No. 9,
2021
Abstract
In this paper, we examine the impact of female Chief Technology Officers (CTOs) on corporate innovation. We find that firms with female CTOs are more innovative (as captured by both patent counts and patent citations) than firms with male CTOs. This effect is more pronounced for firms with a stronger innovation-supportive culture, firms with female CEOs, and when female CTOs are more powerful. Using mediation analyses, we further validate that female CTOs’ transformational leadership style is a plausible mechanism through which they affect innovation positively.
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Individualism, Human Capital Formation, and Labor Market Success
Katharina Hartinger, Sven Resnjanskij, Jens Ruhose, Simon Wiederhold
CESifo Working Paper,
No. 9391,
2021
Abstract
There is an ongoing debate about the economic effects of individualism. We establish that individualism leads to better educational and labor market outcomes. Using data from the largest international adult skill assessment, 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. In fact, individualism is more important in explaining adult skill formation than any other cultural trait that has been emphasized in previous literature. 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.
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Cultural Resilience, Religion, and Economic Recovery: Evidence from the 2005 Hurricane Season
Iftekhar Hasan, Stefano Manfredonia, Felix Noth
IWH Discussion Papers,
No. 9,
2021
Abstract
This paper investigates the critical role of religion in the economic recovery after high-impact natural disasters. Exploiting the 2005 hurricane season in the southeast United States, we document that establishments in counties with higher religious adherence rates saw a significantly stronger recovery in terms of productivity for 2005-2010. Our results further suggest that a particular religious denomination does not drive the effect. We observe that different aspects of religion, such as adherence, shared experiences from ancestors, and institutionalised features, all drive the effect on recovery. Our results matter since they underline the importance of cultural characteristics like religion during and after economic crises.
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Heterogeneity in Criminal Behaviour after Child Birth: the Role of Ethnicity
Kabir Dasgupta, André Diegmann, Tom Kirchmaier, Alexander Plum
Abstract
This paper documents behavioral differences in parental criminality between majority and minority ethnic groups after child birth. The particular effect we exploit is that of the gender of the first-born child on fathers’ convictions rates. Based on detailed judicial and demographic data from New Zealand, we first show that the previously documented inverse relationship between having a son and father’s criminal behaviour holds across the average of the population. However, when splitting the fathers’ sample by ethnicity, the effect appears to be entirely driven by the white part of the population and that there is no effect on the native Maori. The strong ethnic divide is observed along many dimensions and challenges the implicitly made assumption in the economics of crime literature that findings are universally applicable across cultures and race.
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Cultural Norms and Corporate Fraud: Evidence from the Volkswagen Scandal
Iftekhar Hasan, Felix Noth, Lena Tonzer
Abstract
We investigate whether cultural norms shaped by religion drive consumer decisions after a corporate scandal. We exploit the notice of violation by the US Environmental Protection Agency in September 2015 accusing Volkswagen (VW) of using software to manipulate car emission values during test phases. We show that new registrations of VW cars decline significantly in German counties with a high share of Protestants following the VW scandal. Our findings document that the enforcement culture in Protestantism facilitates penalising corporate fraud. We corroborate this channel with a survey documenting that Protestants respond significantly different to fraud but not to environmental issues.
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