National Culture and Risk-taking: Evidence from the Insurance Industry
Chrysovalantis Gaganis, Iftekhar Hasan, Panagiota Papadimitri, Menelaos Tasiou
Journal of Business Research,
April
2019
Abstract
The gravity of insurance within the financial sector is constantly increasing. Reasonably, after the events of the recent financial turmoil, the domain of research that examines the factors driving the risk-taking of this industry has been signified. The purpose of the present study is to investigate the interplay between national culture and risk of insurance firms. We quantify the cultural overtones, measuring national culture considering the dimensions outlined by the Hofstede model and risk-taking using the ‘Z-score’. In a sample consisting of 801 life and non-life insurance firms operating across 42 countries over the period 2007–2016, we find a strong and significant relationship among insurance firms' risk-taking and cultural characteristics, such as individualism, uncertainty avoidance and power distance. Results remain robust to a variety of firm and country-specific controls, alternative measures of risk, sample specifications and tests designed to alleviate endogeneity.
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R&D Collaborations and the Role of Proximity
Philipp Marek, Mirko Titze, Clemens Fuhrmeister,
Regional Studies,
No. 12,
2017
Abstract
R&D collaborations and the role of proximity. Regional Studies. This paper explores the impact of proximity measures on knowledge exchange measured by granted research and development (R&D) collaboration projects in German NUTS-3 regions. The results are obtained from a spatial interaction model including eigenvector spatial filters. Not only geographical but also other forms of proximity (technological, organizational and institutional) have a significant influence on the emergence of collaborations. Furthermore, the results suggest interdependences between proximity measures. Nevertheless, the analysis does not show that other forms of proximity may compensate for missing geographical proximity. The results indicate that (subsidized) collaborative innovation activities tend to cluster.
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Central Bank Transparency and Cross-border Banking
Stefan Eichler, Helge Littke, Lena Tonzer
Journal of International Money and Finance,
2017
Abstract
We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that a rise in central bank transparency in the destination country, on average, increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent and operates in a stable economic environment. Central bank transparency and credibility are thus considered complements by banks investing abroad.
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Is the 'Central German Metropolitan Region' Spatially Integrated? An Empirical Assessment of Commuting Relations
Albrecht Kauffmann
Urban Studies,
No. 9,
2016
Abstract
The 'Central German Metropolitan Region' is a network of cities and their surroundings, located in the three East-German states of Saxony, Saxony-Anhalt and Thuringia. It was founded to bring the bundled strengths of these cities into an inter-municipal cooperation, for making use of the possible advantages of a polycentric region. As theory claims, a precondition for gains from polycentricity is spatial integration of the region. In particular, markets for high skilled labour should be integrated. To assess how this precondition is fulfilled in Central Germany, in the framework of a doubly constrained gravity model the commuting relations between the functional regions of the (until 2013) 11 core cities of the network are analysed. In particular for higher educated employees, the results display that commuting relations are determined not only by distance, but also by the state borders that cross the area.
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Central Bank Transparency and Cross-border Banking
Stefan Eichler, Helge Littke, Lena Tonzer
Abstract
We analyze the effect of central bank transparency on cross-border bank activities. Based on a panel gravity model for cross-border bank claims for 21 home and 47 destination countries from 1998 to 2010, we find strong empirical evidence that a rise in central bank transparency in the destination country, on average, increases cross-border claims. Using interaction models, we find that the positive effect of central bank transparency on cross-border claims is only significant if the central bank is politically independent. Central bank transparency and credibility are thus considered complements by banks investing abroad.
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Does Proximity Matter in the Choice of Partners in Collaborative R&D Projects? – An Empirical Analysis of Granted Projects in Germany
Mirko Titze, Philipp Marek, , Clemens Fuhrmeister
IWH Discussion Papers,
No. 12,
2014
Abstract
This paper contributes to the discussion on the importance of physical distance in the emergence of cross-region collaborative Research and Development (R&D) interactions. The proximity theory, and its extensions, is used as a theoretical framework. A spatial interaction model for count data was implemented for the empirical analysis of German data from the period from 2005 to 2010. The results show that all tested proximity measurements (geographical, cognitive, social and institutional proximity) have a significant positive influence on collaboration intensity. The proximity paradox, however, cannot be confirmed for geographical, social and institutional proximity, but for cognitive proximity.
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Changing Forces of Gravity: How the Crisis Affected International Banking
Claudia M. Buch, Katja Neugebauer, Christoph Schröder
ZEW Discussion Paper, No. 14-006,
2014
Abstract
The global financial crisis has brought to an end a rather unprecedented period of banks’ international expansion. We analyze the effects of the crisis on international banking. Using a detailed dataset on the international assets of all German banks with foreign affiliates for the years 2002-2011, we study bank internationalization before and during the crisis. Our data allow analyzing not only the international assets of the banks’ headquarters but also of their foreign affiliates. We show that banks have lowered their international assets, both along the extensive and the intensive margin. This withdrawal from foreign markets is the result of changing market conditions, of policy interventions, and of a weakly increasing sensitivity of banks to financial frictions.
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Changing Forces of Gravity: How the Crisis Affected International Banking
Claudia M. Buch, Katja Neugebauer, Christoph Schröder
IWH Discussion Papers,
No. 15,
2013
Abstract
The global financial crisis has brought to an end a rather unprecedented period of banks’ international expansion. We analyze the effects of the crisis on international banking. Using a detailed dataset on the international assets of all German banks with foreign affiliates for the years 2002-2011, we study bank internationalization before and during the crisis. Our data allow analyzing not only the international assets of the banks’ headquarters but also of their foreign affiliates. We show that banks have lowered their international assets, both along the extensive and the intensive margin. This withdrawal from foreign markets is the result of changing market conditions, of policy interventions, and of a weakly increasing sensitivity of banks to financial frictions.
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The Structural Determinants of the US Competitiveness in the Last Decades: A 'Trade-Revealing' Analysis
Massimo Del Gatto, Filippo di Mauro, Joseph Gruber, Benjamin Mandel
ECB Working Paper,
No. 1443,
2012
Abstract
We analyze the decline in the U.S. share of world merchandise exports against the backdrop of a model-based measure of competitiveness. We preliminarily use constant market share analysis and gravity estimations to show that the majority of the decline in export shares can be associated with a declining share of world income, suggesting that the dismal performance of the U.S. market share is not a sufficient statistic for competitiveness. We then derive a computable measure of country-sector specific real marginal costs (i.e. competitiveness) which, insofar it is inferred from actual trade ows, is referred to as 'revealed'. Brought to the data, this measure reveals that most U.S. manufacturing industries are losing momentum relative to their main competitors, as we find U.S. revealed marginal costs to grow by more than 38% on average. At the sectoral level, the "Machinery" industry is the most critical.
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Margins of international banking: Is there a productivity pecking order in banking, too?
Claudia M. Buch
Bundesbank Discussion Paper 12/2009,
2009
Abstract
Modern trade theory emphasizes firm-level productivity differentials to explain
the cross-border activities of non-financial firms. This study tests whether a
productivity pecking order also determines international banking activities. Using
a novel dataset that contains all German banks’ international activities, we
estimate the ordered probability of a presence abroad (extensive margin) and the
volume of international assets (intensive margin). Methodologically, we enrich the
conventional Heckman selection model to account for the self-selection of banks
into different modes of foreign activities using an ordered probit. Four main
findings emerge. First, similar to results for non-financial firms, a productivity
pecking order drives bank internationalization. Second, only a few non-financial
firms engage in international trade, but many banks hold international assets, and
only a few large banks engage in foreign direct investment. Third, in addition to
productivity, risk factors matter for international banking. Fourth, gravity-type
variables have an important impact on international banking activities.
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