Mo.Fi.R. Working Papers (2010)


 
 
Mo.Fi.R. Working Papers (>> Mo.Fi.R. website)
 
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47  Andrea Bellucci, Alexander V. Borisov, Alberto Zazzaro
Do Male and Female Loan Officers Differ in Small Business Lending? A Review of the Literature [novembre 2010]
Citations:   CitEc
 
46  Giacomo Cau, Massimiliano Stacchini
The certification role of bank directors on corporate boards [novembre 2010]
Abstract:
  There is a large literature on the effects of the presence of bankers on firms'boards as these bankers may reduce monitoring costs by facilitating information flows between the lender and the borrower, may credibly certify the financial soundness of the firm to other creditors who are not represented in the board and may act as financial experts for the management. At the same time, lending bankers on boards may have a conflict of interests. In this paper, we study the impact of the presence of bankers on firms' boards on interest rates charged to firms. We have two results. First, as interest rates on loans from the board director's bank and from other banks are very similar we do not find evidence of a conflict of interests effect. Second, we have strong evidence of certification effects played by bank directors as rates charged by all banks on loans to firms with bankers on boards are lower than those charged by all banks to firms without bankers. The certification effect is even stronger if the banker on board has itself loaned to the firm.
Citations:   CitEc
 
45  Stefano Caiazza, Andrew Clare, Alberto Franco Pozzolo
What do foreigners want? Evidence from targets in bank cross-border M&As [novembre 2010]
Keywords:
  M&As, bank, bank internationalisation
JEL Classification:
  G15- Financial Economics - General Financial Markets - International Financial Markets
  G21- Financial Economics - Financial Institutions and Services - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  G34- Financial Economics - Corporate Finance and Governance - Mergers; Acquisitions; Restructuring; Corporate Governance
Abstract:
  Given the recent traumatic events in the world?s banking industry it is important to understand what drives bankers to create larger and larger, often multinational, banking groups. In this paper we investigate whether the targets in cross-border bank M&As are materially different from those banks targeted in domestic M&A deals. To address this question we use a sample of over 24,000 banks from more than 100 countries. We begin by estimating the probability that a bank will be a M&A target; this probability is based upon both bank specific and country specific characteristics. The sample also naturally includes banks that were not involved in any M&A deal, this set of banks acts as a control sample for the study. We then estimate a multinomial model that distinguishes between (i) targets in domestic operations, (ii) targets in cross-border operations and (iii) non-targets. The main message of the paper is that, with few exceptions, domestic and foreign investors target similar banks. In particular, contrary to what one might expect, bank size does not affect differently the probability of being a domestic or a cross-border target, but it has a positive and highly significant effect in both cases. What differs between national and international M&As are the characteristics of the countries where banks operate. On average, banking systems characterized by lower leverage, higher cost inefficiency and lower liquidity are more likely to be targets of cross-border acquisitions, while none of this characteristics affects the likelihood of being acquired domestically.
Citations:   CitEc
 
44  Andrea Filippo Presbitero
Total public debt and growth in developing countries [ottobre 2010]
Keywords:
  domestic debt, growth, public debt
JEL Classification:
  F33- International Economics - International Finance - International Monetary Arrangements and Institutions
  F34- International Economics - International Finance - International Lending and Debt Problems
  F35- International Economics - International Finance - Foreign Aid
  O11- Economic Development, Technological Change, and Growth - Economic Development - Macroeconomic Analyses of Economic Development
Abstract:
  The global crisis and the expansionary government reaction in many countries has revamped the attention of policy makers and academics on the growth effects of large public debts. Recent empirical studies investigate the impact of public debt on growth in advanced and emerging countries. This paper aims at complementing the existing evidence focusing on developing countries, where the increase in domestic borrowing, already started before the crisis, requires a more comprehensive analysis, based not only on external debt, but on total public debt. Results on a panel of low- and middle-income countries over the period 1990-2007 show that public debt has a negative impact on output growth up to a threshold of 90 percent of GDP, beyond which its effect becomes irrelevant. This non-linear effect can be explained by country-specific factors since debt overhang is a growth constraint only in countries with sound macroeconomic policies and stable institutions.
Citations:   CitEc
 
43  Chang Hoon Oh, Michele Fratianni
Do Additional Bilateral Investment Treaties Boost Foreign Direct Investments? [ottobre 2010]
Keywords:
  bilateral investment treaty, foreign direct investment, gravity equation, network diversity
JEL Classification:
  F21- International Economics - International Factor Movements and International Business - International Investment; Long-Term Capital Movements
  F53- International Economics - International Relations and International Political Economy - International Agreements and Observance; International Organizations
Abstract:
  This paper finds that the stock of bilateral investment treaties (BIT) is subject to diminishing returns measured in terms of foreign direct investment flows. Diminishing returns are more pronounced among country-pairs that have not signed bilateral investment treaties but have their own BIT network than among country-pairs with their own bilateral investment treaties. For a given country's BIT network, a multinational enterprise finds more value in investing where a bilateral treaty is in place. This may suggest either stronger property-rights protection or greater latitude to use the host country as an export platform. Our subsidiary finding is that an index of a country's BIT network diversity appears to be a plausible explanation of the limiting force underlying the diminishing returns of the stock of BITs in a world where there is a mix between horizontally and vertically integrated multinational enterprises.
Citations:   CitEc
 
42  Alessia Amighini, Andrea Filippo Presbitero, Matteo G. Richiardi
Delocalizzazione produttiva e mix occupazionale [maggio 2010]
Citations:   CitEc
 
41  Alessandra Del Boca, Michele Fratianni, Franco Spinelli, Carmine Trecroci
Wage Bargaining and the Phillips Curve in Italy [aprile 2010]
Keywords:
  Italy, Phillips Curve, inflation, ndexation, wage bargaining
JEL Classification:
  E31- Macroeconomics and Monetary Economics - Prices, Business Fluctuations, and Cycles - Price Level; Inflation; Deflation
  E32- Macroeconomics and Monetary Economics - Prices, Business Fluctuations, and Cycles - Business Fluctuations; Cycles
  J50- Labor and Demographic Economics - Labor–Management Relations, Trade Unions, and Collective Bargaining - General
  N10- Economic History - Macroeconomics and Monetary Economics; Growth and Fluctuations - General, International, or Comparative
Abstract:
  The theme of this paper is whether there was a textbook-like Phillips Curve in post-WWII Italy. We estimate a standard model of the relationship between inflation and the level of real economic activity over the 1949-1998 period and find no evidence of a significant and positive feedback from output to prices. We also estimate similar models for the UK and the US and compare them with the Italian experience. Italy stands out as sharply different from the two Anglo-Saxon countries. We attribute this difference, among other factors, to the role of wage coordination and indexation mechanisms. In particular, the scala mobile, the rigid indexation mechanism aimed at protecting wages from inflation contributed to the persistent inflation bias that Italy experienced almost until its entry into the EMU.
Citations:   CitEc
 
40  Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Franco Pozzolo, Micol Levi
Multinational Banking in Europe: Financial Stability and Regulatory Implications Lessons from the Financial Crisis [aprile 2010]
Abstract:
  This paper examines whether multinational banks have a stabilising or a destabilising role during times of financial distress. With a focus on Europe, it looks at how these banks' foreign affiliates have been faring during the recent financial crisis. It finds that retail and corporate lending of these foreign affiliates has been stable and even increasing between 2007 and 2009. This pattern is related to the functioning of the internal capital market through which these banks funnel funds across their units. The internal capital market has been an effective tool to support foreign affiliates in distress and to isolate their lending from the local availability of financial resources, notwithstanding the systemic nature of the recent crisis. This effect has been particularly large within the EU integrated financial market and for the EMU countries, thus showing complementarity between economic integration and multinational banks' internal capital markets. In light of these findings, this paper supports the call for an integration of the European supervisory and regulatory framework overseeing multinational banks. The analysis is based on an analytical framework which derives the main conditions under which the internal capital market can perform this support function under idiosyncratic and systemic stresses. The empirical evidence uses both aggregate evidence on foreign claims worldwide, and firm-level evidence on the behaviour of banking groups' affiliates, compared to standing alone national banks.
Citations:   CitEc
 
39  Riccardo De Bonis, Massimiliano Stacchini
What Determines the Size of Bank Loans in Industrialized Countries? The Role of Government Debt [aprile 2010]
Keywords:
  bank loans, financial repression, government debt, legal origin of finance
JEL Classification:
  C23- Mathematical and Quantitative Methods - Single Equation Models; Single Variables - Models with Panel Data; Longitudinal Data; Spatial Time Series
  G18- Financial Economics - General Financial Markets - Government Policy and Regulation
  G21- Financial Economics - Financial Institutions and Services - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Abstract:
  Given the importance of banking intermediation, we investigate the determinants of the size of bank loans in 18 OECD countries in the period 1981-1997. The aim of the paper is to show that the ratio of government debt to GDP has a negative effect on the level of bank credit. Second, countries with a German legal origin have higher ratios of loans to GDP than common law countries. Our results are robust to including such variables in the regressions as per capita GDP, stock market capitalization, the banking reserve requirement, the level of inflation and its volatility, openness to trade and the use of different econometric methods.
Citations:   CitEc
 
38  Riccardo De Bonis, Andrea Silvestrini
The Effects of Financial and Real Wealth on Consumption: New Evidence from OECD Countries [aprile 2010]
Keywords:
  Cointegration, Household financial and real wealth, Wealth effect
JEL Classification:
  C23- Mathematical and Quantitative Methods - Single Equation Models; Single Variables - Models with Panel Data; Longitudinal Data; Spatial Time Series
  E21- Macroeconomics and Monetary Economics - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - Consumption; Saving; Wealth
  E44- Macroeconomics and Monetary Economics - Money and Interest Rates - Financial Markets and the Macroeconomy
Abstract:
  In this paper we present new estimates of the effect of household financial and real wealth on consumption. The analysis refers to eleven OECD countries and takes into account the years from 1997 to 2008. Unlike most of the previous literature, we exploit European quarterly harmonized data on household financial assets and liabilities, which have been taken from the flow of funds. We measure not only the effect of total financial wealth on consumption, but we also consider the impact of a subset of those financial assets (i.e., quoted shares, mutual funds, insurance technical reserves) that are more linked to the Stock Exchange. Furthermore, we implement a recent econometric approach that allows for more flexible assumptions in the non-stationary panel framework under consideration. Our main results show that both net financial and real wealth have a positive effect on consumption. Overall, the influence of net financial assets is stronger than that of real assets. Using quoted shares, mutual funds and insurance technical reserves as a measure of financial wealth, we obtain a lower estimate of the marginal propensity to consume, possibly due to the strong concentration of equity instruments in the richest households.
Citations:   CitEc
 
37  Riccardo De Bonis, Giovanni Ferri, Zeno Rotondi
Do bank-firm relationships influence firm internationalization? [aprile 2010]
Keywords:
  bank-firm relationships, export, external finance, foreign direct investments, internationalization, off-shoring
JEL Classification:
  D21- Microeconomics - Production and Organizations - Firm Behavior: Theory
  F10- International Economics - Trade - General
  F21- International Economics - International Factor Movements and International Business - International Investment; Long-Term Capital Movements
  F23- International Economics - International Factor Movements and International Business - Multinational Firms; International Business
  G21- Financial Economics - Financial Institutions and Services - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Abstract:
  We show that a longer relationship length with the main bank fosters Italian firms' foreign direct investment (FDI) and, weakly, production off-shoring abroad. Possibly, longer bank relationships help secure external financing for these companies, which have become more opaque because of their internationalization. In contrast, other than for smaller-sized companies, we detect no impact on firms' propensity to export, suggesting that exporting alters enterprises' financial set-up less than shifting production internationally. We also find a link between the internationalization of the main creditor bank and firm FDIs. Our evidence suggests that reexisting strong bank-firm relationships support manufacturing firms' production internationalization.
Citations:   CitEc
 
36  Mohamed Azzim Gulamhussen, Carlos Pinheiro, Alberto Franco Pozzolo
Do multinational banks create or destroy economic value? [aprile 2010]
Keywords:
  Corporate diversification, Foreign Direct Investment, Gepgraphival diversification, Multinational banking
JEL Classification:
  F23- International Economics - International Factor Movements and International Business - Multinational Firms; International Business
  F36- International Economics - International Finance - Financial Aspects of Economic Integration
  G15- Financial Economics - General Financial Markets - International Financial Markets
  G21- Financial Economics - Financial Institutions and Services - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  G34- Financial Economics - Corporate Finance and Governance - Mergers; Acquisitions; Restructuring; Corporate Governance
  L22- Industrial Organization - Firm Objectives, Organization, and Behavior - Firm Organization and Market Structure
Abstract:
  Multinational banks are a distinctive feature of today's globalized economy, with some institutions now operating in more than 100 countries. Despite the thorough analyses of bank internationalization over the last decades, the literature has failed to provide clear evidence that crossborder expansion is a profitable process from a firm's perspective. Following the long tradition of the analyses of the costs and benefits of focusing or diversifying the activities of a firm, in this paper we provide an answer to the question of whether bank cross-border diversification is value enhancing, comparing the value of internationally diversified commercial banks with that of more domestically focused intermediaries. Adapting the methodology of Laeven and Levine (2007), we measure a bank's excess value as the difference between its Tobin's q and the benchmark of multinational banks, and relate it to the degree of international diversification of its activities. In a large sample of more than 500 banks from 56 countries between 2001 and 2007, we find evidence of a statistically and economically significant diversification premium, that is robust to the use of different definitions of diversification, to the possible effects of outliers, and to controlling for potential endogeneity problems. Our results shown that the benefits of scale and scope economies generated by multinational banks more than offset the typical agency costs of managing larger and more complex companies, thus providing a strong rationale for the rapid growth in banks' international activities during the last couple of decades.
Citations:   CitEc
 
35  Andrea Filippo Presbitero, Alberto Zazzaro
The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded [[n.d.] 2010]
Keywords:
  Global crisis, IMF programs, Washington Consensus, growth
JEL Classification:
  F33- International Economics - International Finance - International Monetary Arrangements and Institutions
  F34- International Economics - International Finance - International Lending and Debt Problems
  F35- International Economics - International Finance - Foreign Aid
  O11- Economic Development, Technological Change, and Growth - Economic Development - Macroeconomic Analyses of Economic Development
Abstract:
  Developing countries are the least to blame for the outbreak of the nancial crisis, but they are destined to suer the most dramatic and long-lasting consequences. This chapter focuses on the early responses of the International Monetary Fund to the present crisis in low- and middle-income countries. The IMF lending policy has been harshly criticized for being sensitive not only to the fundamental imbalances in the economic conditions of borrowing countries, but also to their lobbying capacity and to political-economy interests of the IMF's major shareholders, i.e., the USA and G-7 countries, which dominate the decision-making process and the Fund's view of good economic policies. Preliminary analysis of the 2008 and 2009 IMF arrangements shows that, notwithstanding the recent changes in the lending framework and the severity of the global crisis, the Fund's credit allocation is still mainly driven by the strategic interests of Western countries, instead of the macroeconomic conditions of recipients.
Citations:   CitEc