Department-Kolloquium GE & FARE

11. Dezember 2012, 18:30 Uhr
Campus Wiesbaden, Atrium, Raum Istanbul

Prof. Klaus Schaeck PhD
(Bangor University)

Koautor: Cesar Calderon

"Bank bailouts, competition, and the disparate effects for borrower and depositor welfare"

Abstract:

In this paper, we raise two questions: First, do large-scale government interventions such as blanket guarantees, liquidity support, recapitalizations, and nationalizations affect competition in banking? This question is important because the pricing of banking products has implications for consumer welfare, giving rise to our second question: Do these interventions affect borrower and depositor welfare? Exploiting data for 124 countries that witnessed different policy responses to 41 banking crises, and using difference-in-difference estimations, we present the following key results: (i) Government interventions robustly reduce Lerner indices and net interest margins. This effect remains in place for at least five years, and the interventions coincide with an increase in the number of zombie banks and their market share. (ii) The competition-increasing effect of interventions is greater if banking sectors are more concentrated and less contestable prior to the crises, but the effects are mitigated in more transparent banking systems. (iii) The channel through which interventions reduce interest margins operates via competition in loan rather than deposit markets. (iv) Policy responses disparately affect consumer welfare. While interventions improve borrower welfare by reducing loan rates and sustaining provision of credit, deposit rates decline. In addition, liquidity support, recapitalizations, and nationalizations correlate negatively with access to banking.

Bisherige Vorträge in 2012

27.11.2012

Prof. Dr. Jürgen Eichberger
(Universität Heidelberg)

Koautoren: Jörg Oechsslerz und Wendelin Schnedler

"How do subjects view multiple sources of ambiguity?"

Abstract:
As illustrated by the famous Ellsberg paradox, many subjects prefer to bet on events with known rather than with unknown probabilities, i.e., they are ambiguity averse. In an  experiment, we examine subject's choices when there is an additional source of ambiguity, namely, when they do not know how much money they can win. Using a standard independence assumption, we show that ambiguity averse subjects should continue to strictly prefer the urn with known probabilities. In contrast, our results show that many subjects no longer exhibit such a strict preference. This has important ramifications for modeling ambiguity aversion.

06.11.2012

Prof. Dr. Julia Wolf
(EBS Universität)

"Clan Liability in Multi-Tier Supply Chains?"

Abstract:
Firms increasingly integrate sustainability objectives into supply chain management (SCM) to mitigate the risk of being held responsible for unsustainable behavior by upstream supply chain partners. But how far do such efforts have to go? This research empirically assesses whether and to which extent consumers hold the focal firm they buy from accountable for unsustainable behavior caused by an upstream supply chain partner. We further investigate whether consumers give any credit for efforts related to a sustainable supply chain. Along with this our research examines several contingency factors that may influence responsibility attribution to the focal firm such as severity of the incident or brand recognition. Finally, we examine consequences of attribution by consumers (e.g. boycotts) for the focal firm. Using an experimental research design with a survey instrument, we find that consumers attribute equal levels of responsibility to the focal firm for what happens in the upstream supply chain – be it a tier-1, tier-2 or tier-3 supplier. However, responsibility attributions are lower if the focal firm has built up or promises to build up competences in sustainable supply chain management (SSCM). Also, responsibility attributions are lower for less severe incidents. Finally, we find that higher responsibility attributions elicit negative emotions and behavioral reactions of consumers against the focal firm.

07.02.2012

Prof. Ansgar Richter PhD und    Stefan Hilger
(EBS Universität)                (EBS Universität)

"Should I Stay or Should I Go? Rank-Order Tournaments and Top Executive Voluntary Departures"

Koautor: Utz Schäffer (WHU Vallendar)

Abstract:
What makes top executives leave their positions voluntarily and search for outside career opportunities? We apply survival analysis to model the tenure and mode of exit of CEOs and CFOs from German stock-market quoted companies between 1999 and 2008. Drawing on tournament theory, we argue that top executives also take part in external tournaments for better positions at larger or more prestigious firms. We find evidence that top executives in small firms have a higher motivation to compete in external tournaments, which increases their likelihood of voluntary departure. Moreover, we show that CFOs are more likely to leave their positions voluntarily than CEOs, especially those CFOs not promoted internally following a CEO turnover. Firm performance is less of a driver for top executive voluntary departure than it is for dismissal. Our results reveal that tournament theory might be a fruitful perspective in managerial succession research to explain top executive voluntary departures.