Forced Displacement, Exposure to Conflict and Long-run Education and Income Inequality: Evidence from Croatia and Bosnia and Herzegovina
Adnan Efendic, Dejan Kovač, Jacob N. Shapiro
Abstract
This paper investigates the long-term relationship between conflict-related migration and individual socioeconomic inequality. Looking at the post-conflict environments of Bosnia and Herzegovina (BiH) and Croatia, the two former Yugoslav states most heavily impacted by the conflicts of the early 1990s, the paper focuses on differences in educational performance and income between four groups: migrants, internally displaced persons, refugees, and those who did not move two decades after the conflicts. For BiH, the analysis leverages a municipality-representative survey (n = 6, 021) that captured self-reported education and income outcomes as well as migration histories. For Croatia, outcomes are measured using an anonymized education registry that captured outcomes for over half a million individuals over time. This allows an assessment of convergence between different categories of migrants. In both countries, individuals with greater exposure to conflict had systematically worse educational performance. External migrants now living in BiH have better educational and economic outcomes than those who did not migrate, but these advantages are smaller for individuals who were forced to move. In Croatia, those who moved during the conflict have worse educational outcomes, but there is a steady convergence between refugees and non-migrants. This research suggests that policies intended to address migration-related discrepancies should be targeted on the basis of individual and family experiences caused by conflict.
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On Modeling IPO Failure Risk
Gonul Colak, Mengchuan Fu, Iftekhar Hasan
Economic Modelling,
April
2022
Abstract
This paper offers a novel framework, combining firm operational risk, IPO pricing risk, and market risk, to model IPO failure risk. By analyzing nearly a thousand variables, we observe that prior IPO failure risk models have suffered from a major missing-variable problem. Evidence reveals several key new firm-level determinants, e.g., the volatility operating performance, the size of its accounts payable, pretax income to common equity, total short-term debt, and a few macroeconomic variables such as treasury bill rate, and book-to-market of the DJIA index. These findings have major economic implications. The total value loss from not predicting the imminent failure of an IPO is significantly lower with this proposed model compared to other established models. The IPO investors could have saved around $18billion over the period between 1994 and 2016 by using this model.
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Mission, Motivation, and the Active Decision to Work for a Social Cause
Sabrina Jeworrek, Vanessa Mertins
Nonprofit and Voluntary Sector Quarterly,
Nr. 2,
2022
Abstract
The mission of a job affects the type of worker attracted to an organization but may also provide incentives to an existing workforce. We conducted a natural field experiment with 246 short-term workers. We randomly allocated some of these workers to either a prosocial or a commercial job. Our data suggest that the mission of a job has a performance-enhancing motivational impact on particular individuals only, those with a prosocial attitude. However, the mission is very important if it has been actively selected. Those workers who have chosen to contribute to a social cause outperform the ones randomly assigned to the same job by about half a standard deviation. This effect seems to be a universal phenomenon that is not driven by information about the alternative job, the choice itself, or a particular subgroup.
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Does Working at a Start-up Pay Off?
Daniel Fackler, Lisa Hölscher, Claus Schnabel, Antje Weyh
Small Business Economics,
Nr. 4,
2022
Abstract
Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
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Exposure to Conflict, Migrations and Long-run Education and Income Inequality: Evidence from Bosnia and Herzegovina
Adnan Efendic, Dejan Kovač, Jacob N. Shapiro
Abstract
We investigate the long-term relationship between conflict-related migration and individual socioeconomic inequality. Looking at the post-conflict environment of Bosnia and Herzegovina (BiH), a former Yugoslav state most heavily impacted by the conflicts of the early 1990s, the paper focuses on differences in educational performance and income between four groups: migrants, internally displaced persons, former external migrants, and those who did not move. The analysis leverages a municipality-representative survey (n≈6,000) that captured self-reported education and income outcomes as well as migration histories. We find that individuals with greater exposure to conflict had systematically worse educational performance and lower earnings two decades after the war. Former external migrants now living in BiH have better educational and economic outcomes than those who did not migrate, but these advantages are smaller for individuals who were forced to move. We recommend that policies intended to address migration-related discrepancies should be targeted on the basis of individual and family experiences caused by conflict.
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Income, Trading, and Performance: Evidence from Retail Investors
Dien Giau Bui, Chih-Yung Lin, Iftekhar Hasan, Rui-Xiang Zhai
Journal of Empirical Finance,
March
2022
Abstract
We examine whether household income influences the trading styles of retail investors and their investment performance. To investigate this question, we use a unique dataset of branch-level trading that contains all retail investors and observe that those investors with high income trade more and earn significantly higher returns in the stock market. In addition, this income effect becomes stronger for highly risky stocks, such as gambling or lottery-like stocks. These findings are in line with the information model theorized by Peress (2004) in which wealthy investors take extra risks by trading more stocks.
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Gender, Credit, and Firm Outcomes
Manthos D. Delis, Iftekhar Hasan, Maria Iosifidi, Steven Ongena
Journal of Financial and Quantitative Analysis,
Nr. 1,
2022
Abstract
Small and micro enterprises are usually majority-owned by entrepreneurs. Using a unique sample of loan applications from such firms, we study the role of owners’ gender in bank credit decisions and post-credit-decision firm outcomes. We find that, ceteris paribus, female entrepreneurs are more prudent loan applicants than are males, since they are less likely to apply for credit or to default after loan origination. The relatively more aggressive behavior of male applicants pays off, however, in terms of higher average firm performance after loan origination.
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Do Banks Value Borrowers' Environmental Record? Evidence from Financial Contracts
I-Ju Chen, Iftekhar Hasan, Chih-Yung Lin, Tra Ngoc Vy Nguyen
Journal of Business Ethics,
December
2021
Abstract
Banks play a unique role in society. They not only maximize profits but also consider the interests of stakeholders. We investigate whether banks consider firms’ pollution records in their lending decisions. The evidence shows that banks offer significantly higher loan spreads, higher total borrowing costs, shorter loan maturities, and greater collateral to firms with higher levels of chemical pollution. The costly effects are stronger for borrowers with greater risk and weaker corporate governance. Further, the results show that banks with higher social responsibility account for their borrowers’ environmental performance and charge higher loan spreads to those with poor performance. These results support the idea that banks with higher social responsibility can promote the practice of business ethics in firms.
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Military Directors, Governance and Firm Behavior
Chen Cai, Iftekhar Hasan, Yinjie (Victor) Shen, Shuai Wang
Advances in Accounting,
December
2021
Abstract
We build a large dataset of board of directors with military experience and document a substantial and persistent presence of independent military directors serving on corporate boards. We find that firms with independent military directors are associated with better monitoring outcomes, including less excessive CEO compensation, greater forced CEO turnover–performance sensitivity, and less earnings management.
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Worker Participation in Decision-making, Worker Sorting, and Firm Performance
Steffen Müller, Georg Neuschäffer
Industrial Relations,
Nr. 4,
2021
Abstract
Worker participation in decision-making is often associated with high-wage and high-productivity firm strategies. Using linked employer–employee data for Germany and worker fixed effects from a two-way fixed-effects model of wages capturing observed and unobserved worker quality, we find that plants with formal worker participation via works councils indeed employ higher quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.
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