scholarly journals The Limits of Lending? Banks and Technology Adoption across Russia

2019 ◽  
Vol 33 (2) ◽  
pp. 536-609 ◽  
Author(s):  
Çağatay Bircan ◽  
Ralph De Haas
Keyword(s):  
Productivity Growth ◽  
Credit Markets ◽  
New Products ◽  
Bank Lending ◽  
Bank Credit ◽  
Import Competition ◽  
Data Set ◽  
Oxford University ◽  
The Impact ◽  
Published Paper

AbstractWe exploit historically determined variation in local credit markets to identify the impact of bank lending on innovation across Russian firms. We find that deeper credit markets increase firms’ use of bank credit, their adoption of new products and technologies, and their productivity growth. This relationship is more pronounced in industries farther from the technological frontier, more exposed to import competition, and that export more. These impacts are also stronger for firms near historical R&D centers or railways and in regions with supportive institutions. Consistent with these results, credit markets contribute to economic growth in such regions.Authors have furnished a data set, which is available on the Oxford University Press Web site next to the link to the final published paper online.

scholarly journals Life below Zero: Bank Lending under Negative Policy Rates

2019 ◽  
Vol 32 (10) ◽  
pp. 3728-3761 ◽  
Author(s):  
Florian Heider ◽  
Farzad Saidi ◽  
Glenn Schepens
Keyword(s):  
Risk Taking ◽  
Financial Stability ◽  
Bank Lending ◽  
Bank Credit ◽  
Net Worth ◽  
Oxford University ◽  
European Central ◽  
Editorial Decision ◽  
Funding Cost ◽  
Published Paper

AbstractWe show that negative policy rates affect the supply of bank credit in a novel way. Banks are reluctant to pass on negative rates to depositors, which increases the funding cost of high-deposit banks, and reduces their net worth, relative to low-deposit banks. As a consequence, the introduction of negative policy rates by the European Central Bank in mid-2014 leads to more risk-taking and less lending by euro-area banks with a greater reliance on deposit funding. Our results suggest that negative rates are less accommodative and could pose a risk to financial stability, if lending is done by high-deposit banks.Received April 17, 2018; editorial decision September 18, 2018 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

scholarly journals Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship

2019 ◽  
Vol 33 (9) ◽  
pp. 4061-4101 ◽  
Author(s):  
Tania Babina
Keyword(s):  
Economic Activity ◽  
Financial Distress ◽  
Web Site ◽  
High Tech ◽  
High Wage ◽  
New Firms ◽  
Oxford University ◽  
Service Sectors ◽  
The Impact ◽  
Published Paper

Abstract Using U.S. Census firm-worker data, I document that firms’ financial distress has an economically important effect on employee departures to entrepreneurship. The impact is amplified in the high-tech and service sectors, where employees are key assets. In states with enforceable noncompete contracts, the effect is mitigated. Compared to typical entrepreneurs, distress-driven entrepreneurs are high-wage workers who found better firms, as measured by jobs, pay, and survival. Startup jobs compensate for 33% of job losses at the constrained incumbents. Overall, the financial inability of incumbent firms to pursue productive opportunities increases the reallocation of economic activity into new firms. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

scholarly journals Career Risk and Market Discipline in Asset Management

2019 ◽  
Vol 33 (2) ◽  
pp. 783-828 ◽  
Author(s):  
Andrew Ellul ◽  
Marco Pagano ◽  
Annalisa Scognamiglio
Keyword(s):  
Adverse Selection ◽  
Asset Management ◽  
Significant Loss ◽  
Relative Performance ◽  
Oxford University ◽  
Top Managers ◽  
The Impact ◽  
Asset Managers ◽  
Published Paper ◽  
Scarring Effects

Abstract We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion coupled with a significant loss in imputed compensation. Scarring effects are absent when liquidations are preceded by normal relative performance or involve mid-level employees. Seen through the lens of a model with moral hazard and adverse selection, these scarring effects can be ascribed to a drop in asset managers’ reputation. The findings suggest that performance-induced liquidations supplement compensation-based incentives. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Ambiguity, Volatility, and Credit Risk

2019 ◽  
Vol 33 (4) ◽  
pp. 1618-1672 ◽  
Author(s):  
Patrick Augustin ◽  
Yehuda Izhakian
Keyword(s):  
Credit Risk ◽  
Negative Impact ◽  
Risk Exposure ◽  
Standard Deviation Increase ◽  
Oxford University ◽  
Credit Default ◽  
Significant Negative Impact ◽  
The Impact ◽  
Independent Preferences ◽  
Published Paper

Abstract We explore the implications of ambiguity for the pricing of credit default swaps (CDSs). A model of heterogeneous investors with independent preferences for ambiguity and risk shows that, because CDS contracts are assets in zero net supply, the net credit risk exposure of the marginal investor determines the sign of the impact of ambiguity on CDS spreads. We find that ambiguity has an economically significant negative impact on CDS spreads, on average, suggesting that the marginal investor is a net buyer of credit protection. A 1-standard-deviation increase in ambiguity is estimated to decrease CDS spreads by approximately 6%. (JEL C65, D81, D83, G13, G22) Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

scholarly journals Auto Credit and the 2005 Bankruptcy Reform: The Impact of Eliminating Cramdowns

2019 ◽  
Vol 32 (12) ◽  
pp. 4734-4766 ◽  
Author(s):  
Rajashri Chakrabarti ◽  
Nathaniel Pattison
Keyword(s):  
Interest Rates ◽  
Strong Evidence ◽  
Web Site ◽  
Causal Effect ◽  
Oxford University ◽  
Editorial Decision ◽  
Historical Variation ◽  
The Impact ◽  
Published Paper ◽  
Rule Out

Abstract Auto lenders were perhaps the biggest winners of the 2005 Bankruptcy Reform, as Chapter 13 bankruptcy filers can no longer “cramdown” the amount owed on recent auto loans. We estimate the causal effect of this anticramdown provision on the price and quantity of auto credit. Exploiting historical variation in states’ usage of Chapter 13 bankruptcy, we find strong evidence that eliminating cramdowns decreased interest rates and some evidence that loan sizes increased among subprime borrowers. The decline in interest rates is persistent and is robust to a battery of sensitivity checks. We rule out other reform changes as possible causes. Received September 29, 2016; editorial decision January 15, 2019 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

What Do a Million Observations on Banks Say About the Transmission of Monetary Policy?

2000 ◽  
Vol 90 (3) ◽  
pp. 407-428 ◽  
Author(s):  
Anil K Kashyap ◽  
Jeremy C Stein
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Monetary Transmission ◽  
Bank Lending Channel ◽  
Data Set ◽  
Balance Sheets ◽  
Lending Channel ◽  
The Impact ◽  
Transmission Of Monetary Policy ◽  
Quantitative Importance

We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets—i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a “bank lending channel” of monetary transmission, though they do not allow us to make precise statements about its quantitative importance. (JEL E44, E52, G32)

scholarly journals The Impact of CRD IV on Bank Lending

2019 ◽  
Vol 8 (2) ◽  
pp. 203-217
Author(s):  
Matias Huhtilainen
Keyword(s):  
Bank Lending ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Bank Credit ◽  
Bank Profitability ◽  
Consistent Finding ◽  
Loan Supply ◽  
The Impact ◽  
The Relationship ◽  
Crd Iv

This study addresses the post-financial crisis EU banking regulation reform CRD IV. The specific focus is on the relationship between increased capital requirements and the subsequent change in both supply and the price of bank credit. This study employs a twofold data consisting of a panel of Finnish unlisted savings and cooperative banks’ key figures over the period 2002-2018 and a representative survey conducted with personnel of Finnish institutions. In addition to the consistent finding in regards to the effect of bank profitability as well as fairly consistent findings in regards to the effect of bank size and GDP growth, the key finding suggests a slight decrease in loan supply under the CRD IV.

scholarly journals Historical Returns of the Market Portfolio

2019 ◽  
Vol 10 (3) ◽  
pp. 521-567 ◽  
Author(s):  
Ronald Doeswijk ◽  
Trevin Lam ◽  
Laurens Swinkels
Keyword(s):  
Standard Deviation ◽  
Asset Pricing ◽  
Corporate Finance ◽  
Set Covering ◽  
Data Set ◽  
Oxford University ◽  
Unique Data ◽  
Market Portfolio ◽  
Editorial Decision ◽  
Published Paper

Abstract We create an annual return index for the invested global multiasset market portfolio. We use a newly constructed unique data set covering the entire market of financial investors. We analyze returns and risk from 1960 to 2017, a period during which the market portfolio realized a compounded real return in U.S. dollars of 4.45%, with a standard deviation of annual returns of 11.2%. The compounded excess return was 3.39%. We publish these data on returns of the market portfolio, so they can be used for future asset pricing and corporate finance studies. Received March 4, 2019; editorial decision October 9, 2019 by Editor Jeffrey Pontiff. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Stock Market Rumors and Credibility

2019 ◽  
Vol 33 (8) ◽  
pp. 3804-3853
Author(s):  
Daniel Schmidt
Keyword(s):  
Stock Market ◽  
Information Sharing ◽  
Stock Prices ◽  
Information Acquisition ◽  
Investment Horizon ◽  
Data Set ◽  
Market Prices ◽  
Oxford University ◽  
Credible Information ◽  
Published Paper

Abstract Stock prices occasionally move in response to unverified rumors. I propose a cheap talk model in which a rumormonger’s incentives to tell the truth depend on the interaction between her investment horizon and the information acquisition decisions of message-receiving investors. The model’s key prediction is that short investment horizons can facilitate credible information sharing between investors, thereby accelerating the information capitalization into market prices. Analyzing a data set of takeover rumors covered by U.S. newspapers, I find suggestive evidence in support of this prediction. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

scholarly journals Technology, TFPG and Employment: A Panel Data Analysis

2020 ◽  
Author(s):  
Sameer Malik ◽  
Arup Mitra
Keyword(s):  
Panel Data ◽  
Productivity Growth ◽  
Industrial Development ◽  
Panel Data Analysis ◽  
Labour Productivity ◽  
Positive Association ◽  
Data Set ◽  
Development Organization ◽  
Labour Productivity Growth ◽  
The Impact

Abstract This paper based on the United Nations Industrial Development Organization (UNIDO) panel data set makes an attempt to estimate total factor productivity growth across countries. Productivity convergence over time is evident when countries are divided across regions which could be attributed to a greater degree of association of countries in a given region pursuing joint efforts for infrastructural development, ICT coverage and advancement, trade negotiations, technology acquisition and innovation, and inflow of FDI. In terms of efficiency estimates for select years most of the countries are seen to be operating much below the frontier. This is indicative of the fact that countries are keen to pursue resource-driven growth in an attempt to maximize it. Based on the inter-temporal data we observed that a number of countries registered either a negative or a positive but low correlation between labour productivity growth and TFPG. Evidently, countries are engaged in greater mechanization which may be raising labour productivity without ushering in much success in terms of TFPG. From panel data regression the impact of technology perceived in terms of TFPG, on employment is seen to be negligible though it is important to note that none of the groups, income or region wise, recorded a statistically significant negative effect except the LDC, while the significant cases (howsoever scanty) reveal a positive association. Appropriate incentives may motivate firms to experience technological progress and employment growth both.

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