Trust, Politics and Post-IPO Performance: SOEs vs. the Private Sector
Bill Francis, Iftekhar Hasan, Xian Sun, Mingming Zhou
Economic and Political Studies,
No. 3,
2022
Abstract
This paper empirically investigates the role of social trust in the long-term performance of the initial public offerings (IPOs) in China, controlling for the formal institutional environment. We find that privately owned or smaller IPO firms experience significantly better post-IPO performance when they are incorporated in regions with more social trust. The state-owned and bigger IPO firms, on the other hand, experience better long-term post-IPO performance when they are incorporated in regions with stronger formal institutions (e.g. court enforcement and contract holding). Political pluralism turns out to benefit all IPOs in the long term. In addition, our evidence shows that stronger social trust substitutes for the quality of court enforcement but complements the role of contract holding. These results are robust after controlling for alternative definitions of ownership, outliers, non-linear effects of institutions, and the potential endogeneity of institutions in the model.
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28.06.2022 • 15/2022
Gefahr einer Gaslücke gegenüber April deutlich verringert – aber Versorgungsrisiken bleiben
Die Wahrscheinlichkeit einer Versorgungslücke mit Erdgas im Fall eines Stopps russischer Lieferungen ist gegenüber April deutlich gesunken. Zu diesem Ergebnis kommt eine aktualisierte Simulationsrechnung der an der Gemeinschaftsdiagnose beteiligten Institute. Trotz mittlerweile deutlich besser gefüllter Speicher sind damit aber noch nicht alle Risiken für die Gasversorgung der Industrie im Winterhalbjahr 2022/2023 gebannt. Es ist daher ratsam, zeitnah die Preissignale bei den Verbrauchern ankommen zu lassen.
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The State Expropriation Risk and the Pricing of Foreign Earnings
Iftekhar Hasan, Ibrahim Siraj, Amine Tarazi, Qiang Wu
Journal of International Accounting Research,
No. 2,
2021
Abstract
We examine the pricing of U.S. multinational firms' foreign earnings in regard to their risk of expropriation and unfair treatment by the governments of the countries in which their international subsidiaries are located. Using 8,891 firm-years observations during the 2001–2013 period, we find that the value relevance of foreign earnings increases with the improvement of the protection from state expropriation risk in the subsidiary host-countries. Our results are not driven by the earnings management practice, investor distraction, country informativeness, and political and trade relationship of a foreign country with the U.S. Furthermore, our results are robust to the confounding effects of country factors, measurement error in the variable of the risk of expropriation, the influence of private contracting institutions, and endogeneity in the decision of the location of subsidiaries.
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The Effects of Graduating from High School in a Recession: College Investments, Skill Formation, and Labor-Market Outcomes
Franziska Hampf, Marc Piopiunik, Simon Wiederhold
CESifo Working Paper,
No. 8252,
2020
Abstract
We investigate the short- and long-term effects of economic conditions at high-school graduation as a source of exogenous variation in the labor-market opportunities of potential college entrants. Exploiting business cycle fluctuations across birth cohorts for 28 developed countries, we find that bad economic conditions at high-school graduation increase college enrollment and graduation. They also affect outcomes in later life, increasing cognitive skills and improving labor-market success. Outcomes are affected only by the economic conditions at high-school graduation, but not by those during earlier or later years. Recessions at high-school graduation narrow the gender gaps in numeracy skills and labor-market success.
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The Political Economy of Financial Systems: Evidence from Suffrage Reforms in the Last Two Centuries
Hans Degryse, Thomas Lambert, Armin Schwienbacher
Economic Journal,
No. 611,
2018
Abstract
Voting rights were initially limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development, as this new electorate has lower financial holdings and benefits less from the riskiness and financial returns from stock markets. Our panel data evidence covering the years 1830–1999 shows that tighter restrictions on the voting franchise induce greater stock market development, whereas a broader voting franchise is more conducive to the banking sector, consistent with Perotti and von Thadden (2006). The results are robust to controlling for other institutional arrangements and endogeneity.
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02.05.2018 • 10/2018
IWH Policy Talk „Think global – Internationalisierung als Hochschulpolitik.“ Karamba Diaby, MdB, zu Gast am IWH
Das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) lädt am Dienstag, dem 8. Mai 2018, um 17:00 Uhr zu einem IWH Policy Talk zum Thema „Think global – Internationalisierung als Hochschulpolitik“ mit Karamba Diaby, Mitglied des Deutschen Bundestags, in den Konferenzsaal des Instituts ein.
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Endogenous Institution Formation in Public Good Games: The Effect of Economic Education
Martin Altemeyer-Bartscher, Dmitri Bershadskyy, Philipp Schreck, Florian Timme
IWH Discussion Papers,
No. 29,
2017
Abstract
In a public good experiment, the paper analyses to which extent individuals with economic education behave differently in a second-order dilemma. Second-order dilemmas may arise, when individuals endogenously build up costly institutions that help to overcome a public good problem (first-order dilemma). The specific institution used in the experiment is a communication platform allowing for group communication before the first-order public good game takes place. The experimental results confirm the finding of the literature that economists tend to free ride more intensively in public good games than non-economists. The difference is the strongest in the end-game phase, yielding in the conclusion that the magnitude of the end-game effect depends on the share of economists in the pool of participants. When it comes to the building-up of institutions, the individual efficiency gain of the institution and its inherent cost function constitute the driving forces for the contribution behaviour. Providing an investment friendly environment yields in economists contributing more to the institution than non-economists. Therefore, we make clear that first-order results of a simple public good game cannot be simply applied for second-order incentive problems.
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Bank Financing, Institutions and Regional Entrepreneurial Activities: Evidence from China
Iftekhar Hasan, Nada Kobeissi, Haizhi Wang, Mingming Zhou
International Review of Economics and Finance,
November
2017
Abstract
We investigate the effects of bank financing on regional entrepreneurial activities in China. We present contrasting findings on the role of quantity vs. quality of bank financing on small business formation in China: while we document a consistent, significantly positive relationship between the quality of bank financing and new venture formation, we find that the quantity of supplied credit is insignificant. We report that formal institutions are positively correlated to regional entrepreneurial activities, and informal institutions substitute formal institutions. Our findings also reveal that the institutional environment tends to supplement bank financing in promoting regional entrepreneurial activities.
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01.11.2017 • 38/2017
IWH Policy Talk „Risk Sharing and Risk Reduction – The Challenges that Lie Ahead“
The Halle Institute for Economic Research (IWH) – Member of the Leibniz Association is pleased to inform about its next upcoming IWH Policy Talk „Risk Sharing and Risk Reduction – The Challenges that Lie Ahead“ with Andrea Enria, first Chairperson of the European Banking Authority (EBA). The talk will take place on Tuesday, No¬vember 7, 2017, 5:00 p.m., in the IWH conference room. You are hereby cordially invited to attend.
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20.04.2017 • 21/2017
IWH Policy Talk: „Gewissenlose Kapitalisten oder Motor der Zukunft? Private Equity in Europa“
Das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) lädt am Montag, dem 24. April 2017 um 17:00 Uhr zu seinem zweiten IWH Policy Talk zum Thema „Gewissenlose Kapitalisten oder Motor der Zukunft? Private Equity in Europa“ mit Peter Cornelius von AlpInvest in den Konferenzsaal des Instituts ein.
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