This paper adds to the recent literature on finance and employment creation by exploring the effect of finance on the labour market, using data on 143 countries from 1995 to 2015. We also examine whether the impact of financial development on labour is significantly different before and after the 2008 global financial crisis. This paper has five main findings. First, the analysis confirms the positive

This paper investigates the way in which the financial market defines and evaluates different business models, using a sample of listed European banking groups from 2006 to 2015. The main findings suggest that the financial market seems to associate a better risk‐return trade‐off to non‐banking fees than to banking ones and that the performance of different business models varies depending on context

This paper investigates the effects on riskiness and performance of gender diversity in Italian bank boards. Italy deserves special attention because European comparisons for the 2000s show that it was among the European Union countries where women were least represented in bank boardrooms, and this gap remains even in a quota law regime. Our main econometric results suggest that gender diversity may

We propose a tool to predict risks to economic growth and international business cycles spillovers: the gross domestic product (GDP)‐Network conditional value at risk (CoVaR). Our methodology to assess Growth‐at‐Risk is composed of two building blocks. In the first step, we apply a machine learning methodology, namely the network‐based NETS by Barigozzi and Brownlees, to identify significant linkages

The paper makes two contributions. First, it analyzes net foreign assets (NFA) and liabilities in selected Arab countries. Second, the paper examines the effects of policy variables that affect the accumulation of NFA and its components, analyzing how the existence of a sovereign wealth fund (SWF), the country's exchange rate regime, and the development of its financial system affect its NFA. The main

Given the importance of the U.S. in global commodity markets, the goal is to explore whether U.S. economic policy uncertainty impacts the price performance of certain commodities. The analysis uses the Granger causality in quantiles method that allows us to test whether there are different effects under different market conditions. The results document that economic uncertainty impacts the returns

In the aftermath of the Great Recession, the number of bank branches declined in most developed countries. In this paper, we investigate how banks have downsized their branch networks in Italy, by comparing the pre‐ and post‐crisis spatial distribution of branches. By using a detailed data set that includes a wide set of controls for the characteristics of each bank branch, we estimate the probability

This paper studies the determinants of technological catch‐up considering spatial and sectoral aggregation of industries. We investigate how geographical and technological proximity to the technology leader impact regional employment growth. We model technological progress by means of a hierarchical process of catch‐up to the technology leader. We also incorporate measures for knowledge spillover effects

In this paper, we investigate how the 5‐year Swedish municipal bond yield has been related to the corresponding yield on government bonds during the period that the Riksbank has conducted unconventional monetary policy in terms of bond purchases. Using daily Swedish data on bond yields from February 2015 to January 2018, we first conduct an event study to assess the short‐run effects of the Riksbank's

De Loecker, Eeckhout, and Unger document that since 1980 aggregate markups in the U.S. economy have significantly increased from 21% above cost to 61% now. In light of this evidence, this paper revisits optimal fiscal and monetary policy recommendations of standard New Keynesian models and shows that under empirically relevant calibrations of market power they radically change: the optimal inflation

Previous writers have attempted to resolve the equity premium puzzle by employing a utility function that depends on current consumption minus (or relative to) past habit consumption. This paper points out that an individual's current utility may also depend upon how well off in the recent past he or she had expected to be today. Hence we add the concept “expectation formation” to the utility modification

In this paper, we use daily data from October 2011 to May 2019 to estimate the monthly realized correlation between stock returns of the United States (US) and Bitcoin returns. Then, we relate the realized correlation with a news-based measure of the growth of trade uncertainty for the US. Our results show that the realized correlation is negatively impacted by increases in trade uncertainty, suggesting

This paper evaluates the forecasting performance of the policy-rate path published by the Swedish central bank, the Riksbank. Using data from 2007 to 2019, I find that the Riksbank's forecast has b ...

This paper investigates how a prolonged period of low‐interest rates affects bank intermediation activity. We use data for 113 large international banks headquartered in 14 major advanced economies during the period 1994–2015. We find that low‐interest rates induce banks to shift their activities from interest‐generating to fee‐related and trading activities. This rebalancing is stronger for low capitalised

This paper discusses how the introduction of the Banking Recovery and Resolution Directive (BRRD) in European Union legislation may change the retail banking business model, which is the most prevalent model in Southern European countries. The main point is the treatment of deposits in the BRRD. Uninsured deposits may be written down or converted into equity in case of resolution of a bank. This contrasts

We use a data‐driven classification of systemically important European banks into business models based on confidential granular supervisory data and investigate whether banks following different models differ with respect to their capitalisation and profitability. Our aim is to locate the banks' business model in a risk‐return space. Using an instrumental variables approach, our econometric methodology

This paper investigates the performance of size‐ and value‐based strategies in the Italian stock market in the period 2000–2018. Previous research argued the impossibility to define properly value‐sorted portfolios due to the inaccuracy of book‐to‐market ratios available for Italian listed stocks. Using more accurate data, we implement portfolios sorting based on value and growth stocks, to assess

We use the results of the ECB's comprehensive assessment to evaluate the importance of the bank business model on risk assessment and the persuasive effectiveness of different supervisory styles on banks’ recapitalization. Our analysis reveals inconsistencies in the information content provided by the various regulatory measures used for assessing bank stability. Moreover, opposite to CET1 ratio, the

Regional banks have a competitive advantage in that short distances to clients enable the use of soft information for superior lending decisions. If the ambition of FinTech start‐ups to create superior screening and monitoring technologies materialises, this advantage would be diminished and regional banks would become superfluous for small firm finance. To explore this claim, the paper in hand analyses

In this paper, we apply an algorithm developed by Martin Weitzman to quantify the extent of diversity among the business models of financial intermediaries at an international level. In particular, we investigate the relationship between the diversity of the business models of EU national banking systems and their profitability and riskiness. We show how Weitzman's approach can be generally applied

The paper investigates the impact of macroeconomic conditions on the profitability of EU banks, by testing for differential effects according to the business model. We group banks into three business models using a hierarchical cluster analysis, and find that using clusters based on the share of assets invested in loans reveals heterogeneity in the sensitivity of bank profitability to economic growth

Does money affect productivity? We examine whether bank deposits, a measure of the money supply that excludes currency in circulation, influence labour productivity. Banks deposits are special in that they facilitate transactions and, in aggregate, add liquidity and credit availability to a region. By exploiting the distribution of community bank deposits across the states, we test the hypothesis that

This study estimates the intertemporal model for the relationship between exports and imports and examines the sustainability of current account deficits (CADs) and the validity of intertemporal budget constraint for 24 Organisation for Economic Co‐operation and Development countries. The standard ordinary least squares (OLS)‐based two‐step Engle and Granger test, the cointegration regression Durbin–Watson

The paper uses a unique survey of remittance-receiving individuals from Tajikistan to study the impact of policy awareness on consumer behavior. The results show that knowledge of deposit insurance encourages the use of formal channels for transmitting remittances and reduces dollarization. Given the size and importance of remittances in Tajikistan, improving financial literacy and better publicizing

Ferreira, Dionisio, and Correia (2018. Physica A: Statistical Mechanics and Its Applications. 505, 680–687) showed that African stock markets at different time frames (before the Lehman Brothers financial crisis, during the crisis, and after the crisis) do not satisfy the efficient market hypothesis. Here, we provide evidence by means of six different nonparametric tests, and the fit of GARCH(1, 1)

This paper examines the behavior of remittances over the business cycle and their potential to act as a stabilizer during periods of high business cycle volatility. Four main findings are reported. First, in theory, the cyclical behavior of remittances depends on the motives to remit. Second, remittances are less volatile than other foreign currency flows but do not appear to systemically co-move with

We propose a new test to evaluate the impact of horizontal mergers on competition in the banking industry. The test is designed to be applied ex ante to potential mergers while being parsimonious in terms of data, as it only uses information on branches in local markets. The test is a counterfactual exercise based on a two‐stage model where banks compete in branching and interest rates and requires

The rising number of foreign workers in Italy during the last fifteen years has led to a conspicuous increase in the amount of remittances sent abroad. In this paper we examine the determinants of remittance outflows originated in Italy and transferred abroad through registered financial intermediaries. After controlling for a wide set of socio-economic regressors, we document a strong positive relation

Periodically collapsing rational bubbles model speculative demand in asset markets. The price and quantity of bitcoin are integrated of different orders, which is evidence of a bubble. Cointegration tests that allow for the potential presence of such bubbles with alternative proxies for fundamentals cannot reject a bubble in bitcoin.

The paper investigates the relationship between fund performance and fund characteristics of North American private equity (PE) funds, by analyzing the interactions of fund size, fund sequence, and past fund performance on traditional fund return measures. The empirical evidence is based on both linear and polynomial regressions, on a sample of 345 venture capital (VC) and 411 buyout (BO) funds with

Asymmetric information and lack of collateral creates a suboptimal allocation of financial resources to those in most need. When uncollateralised borrowers approach financial institutions, the presence of moral hazard and adverse selection results in no lending. Conversely, group‐lending contracts—joint liability, dynamic lending, and social cost for defaulting—control for information asymmetries and

Tsionas has offered a more revisionist approach to the empirics of the nexus between financial development and economic growth following our paper entitled ‘Financial development and economic growth nexus: A revisionist approach’. In the current note, we engage Tsionas’ approach in tandem with our original finance–growth nexus review. We concur with Tsionas’ approach and reiterate that the debate on

This paper investigates the relationship between international migration, remittances and human capital investment in Kenya. We use household level data from the 2009 Kenya Migration Household Survey (produced by the Africa Migration Project) to test our hypothesis and uncover a positive and significant relationship between the amount of international remittances a household receives and the amount