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DIW Discussion Papers 1739 / 2018
This paper sheds new light on how African countries’ legal systems and institutions influence the governance and stability of their banks. We find that institutional factors, in particular the legal family of origin, political stability, contract enforcement and strength of investor protection promote central corporate governance reforms. Using a difference-in-difference approach, we also reveal that ...
2018| Samuel Mutarindwa, Dorothea Schäfer, Andreas Stephan
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DIW Discussion Papers 1738 / 2018
Common ownership - where two firms are at least partially owned by the same investor - and its impact on product market outcomes has recently drawn a lot of attention from scholars and practitioners alike. Theoretical and empirical researchsuggests that common ownership can lead to higher prices. This paper focuses on implications for market entry. To estimate the effect of common ownership on entry ...
2018| Melissa Newham, Jo Seldeslachts, Albert Banal-Estanol
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DIW Discussion Papers 1737 / 2018
To internalize pollution externalities into household waste generation, Unit Pricing Systems (UPS) have been adopted worldwide. This paper evaluates the causal effects of a UPS on the disposal of municipal solid waste in Trento, Italy. To account for policy endogeneity due to unobservables, we employ the synthetic control method on a unique panel of monthly waste generation. Our results show that the ...
2018| Matheus Bueno, Marica Valente
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DIW Discussion Papers 1736 / 2018
Dieses Discussion Paper wurde auf Wunsch der Autoren zurückgezogen. - This discussion paper was withdrawn at the request of the authors.
2018| Olaf Hübler, Lukas Menkhoff, Ulrich Schmidt
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DIW Discussion Papers 1735 / 2018
In the 2011 post-Arab Spring migration wave, over 64,000 migrants landed on the southern Italian coast, with many of them potentially working illegally on farms through caporalato, a widespread system of illegal recruitment of underpaid farm labor run by Italian agrimafias. To test this hypothesis, this paper evaluates the causal effects of the 2011 migration wave on reported labor productivity focusing ...
2018| Stefan Seifert, Marica Valente
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DIW Discussion Papers 1734 / 2018
Assortment decisions are key strategic instruments for firms responding to local market conditions. We assess this claim by studying the effect of a national merger between two large Dutch supermarket chains on prices and on the depth as well as composition of assortment. We adopt a difference-in-differences strategy that exploits local variation in the merger’s effects, controlling for selection on ...
2018| Elena Argentesi, Paolo Buccirossi, Roberto Cervone, Tomaso Duso, Alessia Marrazzo
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DIW Discussion Papers 1733 / 2018
Using exchange rates futures instead of forwards completes the maturity spectrum of the correlation between the spot return and the premium. The correlation decreases with increasing maturity, presumably due to a latent risk premium. We hypothesize that the influence of the unobserved risk factor has a contract-specific risk component. Our main contribution is to control for the omitted variable bias ...
2018| Kerstin Bernoth, Jürgen von Hagen, Casper G. de Vries
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DIW Discussion Papers 1732 / 2018
We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the largescale industries, including the innovative part of manufacturing, ...
2018| Alexander Konon, Michael Fritsch, Alexander S. Kritikos
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DIW Discussion Papers 1731 / 2018
This paper examines the degree of persistence in UK inflation by applying long-memory methods to historical data that span the period from 1660 to 2016. Specifically, we use both parametric and non-parametric fractional integration techniques, that are more general than those based on the classical I(0) vs. I(1) dichotomy. Further, we carry out break tests to detect any shifts in the degree of persistence, ...
2018| Guglielmo Maria Caporale, Luis A. Gil-Alana, Tommaso Trani
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DIW Discussion Papers 1730 / 2018
Are there economies of scale to data in internet search? This paper is first to use real search engine query logs to empirically investigate how data drives the quality of internet search results. We find evidence that the quality of search results improve with more data on previous searches. Moreover, our results indicate that the type of data matters as well: personalized information is particularly ...
2018| Maximilian Schäfer, Geza Sapi, Szabolcs Lorincz
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DIW Discussion Papers 1729 / 2018
We use a cointegrated structural vector autoregressive model to investigate the relation between euro area monetary policy and the stock market. Since there may be an instantaneous causal relation we consider long-run identifying restrictions for the structural shocks and also use (conditional) heteroskedasticity in the residuals for identification purposes. Heteroskedasticity is modelled by a Markov-switching ...
2018| Helmut Lütkepohl, Aleksei Netsunajev
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DIW Discussion Papers 1728 / 2018
This study analyses how liquidity risk affects bonds’ yield spreads after controlling for credit risk, bond-specific characteristics and macroeconomic variables. Using two liquidity estimates, LOT liquidity and the bid-ask spread, we find that, in particular, the LOT liquidity measure has explanatory power for the yield spread of green bonds. Overall, however, the impact of LOT decreases over time, implying ...
2018| Febi Wulandari, Dorothea Schäfer, Andreas Stephan, Chen Sun
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DIW Discussion Papers 1727 / 2018
This paper introduces a new international longitudinal database of governmental housing policies. The regulations are measured using binary variables based on a thorough analysis of the real-time country-specific legislation. Three major restrictive policies are considered: rent control, protection from restriction, and housing rationing. The database covers 47 countries and states between 1910 and ...
2018| Konstantin A. Kholodilin
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DIW Discussion Papers 1726 / 2018
The transition towards low-carbon economies requires massive investments into renewable energies, which are commonly supported through regulatory frameworks. Yet, governments can have incentives - and the ability - to deviate from previously-announced support once those investments have been made, which can deter investments. We analyze a renewable energy regulation game, apply a model of time-inconsistency ...
2018| Nils May, Olga Chiappinelli
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DIW Discussion Papers 1725 / 2018
This paper analyzes how subjective expectations about wage opportunities influence the job search decision. We match data on subjective wage expectations with administrative employment records. The data reveal that unemployed individuals over-estimate their future net re-employment wage by 10% on average. In particular, the average individual does not anticipate that wage offers decline in value with ...
2018| Sascha Drahs, Luke Haywood, Amelie Schiprowski
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DIW Discussion Papers 1724 / 2018
The European debt crisis has revealed serious deficiencies and risks on a proper functioning of the monetary union. Against this backdrop, early warning systems are of crucial importance. In this study that focuses on euro area member states, the robustness of early warning systems to predict crises of government debt is evaluated. Robustness is captured via several dimensions, such as the chronology ...
2018| Christian Dreger, Konstantin A. Kholodilin
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DIW Discussion Papers 1723 / 2018
A common finding in the entrepreneurship literature is that business creation increases in recessions. This counter-cyclical pattern is examined by separating business creation into two components: “opportunity” and “necessity” entrepreneurship. Although there is general agreement in the previous literature on the conceptual distinction between these two factors driving entrepreneurship, there are ...
2018| Robert W. Fairlie, Frank M. Fossen
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DIW Discussion Papers 1722 / 2018
We study the state-dependent trading behavior of financial intermediaries in the oil futures market, using structural vector autoregressions with Markov switching in heteroskedasticity. We decompose changes in futures price volatility into changes in the slopes of traders' demand curves and in the variability of their demand shocks. We find that the downward-sloping demand curve of intermediaries steepens ...
2018| Daniel Bierbaumer, Malte Rieth, Anton Velinov
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DIW Discussion Papers 1721 / 2018
We study the characteristics of inflation targeting as a shock absorber, using quarterly data for a large panel of countries. To overcome an endogeneity problem between monetary regimes and the likelihood of crises, we propose to study large natural disasters. We find that inflation targeting improves macroeconomic performance following such exogenous shocks. It lowers inflation, raises output growth, ...
2018| Marcel Fratzscher, Christoph Grosse Steffen, Malte Rieth
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DIW Discussion Papers 1720 / 2018
Despite considerable policy efforts, women continue to be underrepresented in positions of power and decision making. As an important aspect of women empowerment, we examine women’s participation in intrahousehold financial decision making and how this is affected by financial literacy. Using both OLS and IV regression analysis, we show that women with higher financial literacy are more involved in ...
2018| Antonia Grohmann, Annekathrin Schoofs