Securitisation and the bank lending channel

The dramatic increase in securitisation activity experienced in Europe in the years following the introduction of the euro has altered the liquidity, credit and maturity transformation role traditionally performed by banks. We claim that the changing role of credit intermediaries due to securitisation has also modified the effectiveness of the bank lending channel and banks’ ability to grant loans. We use a novel database of securitisation activity and a large sample of European banks and find that the use of securitisation shelters banks’ loan supply from the effects of monetary policy. Securitisation activity has also strengthened banks’ capacity to supply new loans. This capacity, however, depends on business cycle conditions and, notably, on banks’ risks positions. The recent credit crisis is instructive in this respect.     

Are Homegrown Islamic Terrorists Different? Some UK Evidence

We compare the characteristics of 77 homegrown Islamic terrorists in the UK to a representative sample of 1363 UK Muslims. UK Muslims are more likely to participate in terrorist acts if they are better educated and young. Other predictors of UK Muslims being involved in terrorism are employment status, UK citizenship, and ethnic origin.     

The (small) blessing of foreign aid: further evidence on aid’s impact on democracy

In an empirical contribution to the literature of foreign aid, we estimate the impact of foreign aid on democracy in a panel of 93 developing economies during 1971–2010. We find that foreign aid promotes democracy, with the result robust to different estimation methodologies and control variables and to instrumenting for foreign aid.     

Does financial development reduce corruption?

We estimate the impact of bank credit to the private sector on corruption, using indicators of a country’s legal origin as instrumental variables to assess causality. We find that bank credit to the private sector reduces corruption, with the result robust to instrumenting for bank credit and for many different controls.     

Globalization and Shifting Economic Centers of Gravity

Changes in the political economy of countries in several parts of the world changed its economic balance, where traditional economic centers lost their relative significance and emerging countries gained. This study identifies and tracts the changes in economic centers of gravity for each country and regional economic bloc, and the whole world for the period of 1970 to 2009. It uses a different methodology and significantly higher number of locations, resulting in more reasonable centers than the previous research. The results demonstrate the increasing significance of Asian economies and illustrate the changes in the soft economic power across regions and the world, in countries’ ability to increase their multinationals’ market access, influence international policies, and be an attraction for skilled immigrants. Further, results can be used by multinationals for their location decisions. Results also suggest that the economic centers of gravity for countries in an economic bloc are moving toward the regional centers for that bloc. © 2014 Wiley Periodicals, Inc.     

Consistent Estimates of Regional Blocs' Trade Effects

This paper builds upon Feenstra (2002) to obtain consistent estimates of trade effects of regional blocs by adding bilateral effects to the gravity equation and analyzing its variation across blocs of different intensity. The results are then compared across different gravity equations used in the literature only to observe significant variation in sign, magnitude, and significance. The consequent equation shows that the effect is positive for economics cooperation agreements and preferential trade agreements, but free‐trade agreements do not have a significant incremental effect. While customs unions have a positive incremental effect over blocs of lower intensity, the incremental effect is mixed for monetary unions, and negative for economic areas and full integrations. Furthermore, the effect varies with the duration and degree of implementation as well as the coverage of blocs. Lastly, changes in trade effects of the European blocs across time observed and policy implications are discussed.     

The Reorientation of Transition Countries’ Exports: Changes in Quantity, Quality and Variety

Exports from transition countries to market economies have increased considerably since the fall of socialism. The countries of Central and Eastern Europe have generally been more successful in this regard than the countries of the Commonwealth of Independent States. There are also considerable differences between countries within both the CEEC and the CIS, however. The following paper uses a variety of measures to determine the factors behind these cross-country differences.     

Ethics in Practice: What Are Managers Really Doing?

This study asked managers with different educational backgrounds and experience from a variety of industries of a variety of sizes representing both genders and various predominant managerial functions at different levels to “describe the skills they think are necessary to perform their jobs effectively”. In particular, they were asked to rank 178 behavioral skills presented under 22 different categories that described different aspects of management. Data were then examined first to determine the importance of ethics or integrity overall in the group of managerial activities and then to explore how specific ethical activities of managers differ across various managerial and organizational characteristics. Findings indicate that ethics is still considered one of the least important skills necessary in managers’ daily work. However, once specific ethical activities are analyzed separately, significant differences are found across characteristics of managers, as well as those of the organizations at which they work.     

Examining the Relationships between Capital,Risk and Efficiency in European Banking

This paper analyses the relationship between capital, risk and efficiency for a large sample of European banks between 1992 and 2000. In contrast to the established US evidence we do not find a positive relationship between inefficiency and bank risk‐taking. Inefficient European banks appear to hold more capital and take on less risk. Empirical evidence is found showing the positive relationship between risk on the level of capital (and liquidity), possibly indicating regulators' preference for capital as a mean of restricting risk‐taking activities. We also find evidence that the financial strength of the corporate sector has a positive influence in reducing bank risk‐taking and capital levels. There are no major differences in the relationships between capital, risk and efficiency for commercial and savings banks although there are for co‐operative banks. In the case of co‐operative banks we do find that capital levels are inversely related to risks and we find that inefficient banks hold lower levels of capital. Some of these relationships also vary depending on whether banks are among the most or least efficient operators.     

Examining the global reach of the 2008 US economic downturn

This article analyzes how the 2008 US economic downturn propagated through the global trading system, creating an economic contagion around the world. Consistent with previous global crises, the reach and impact of this crisis is not the same across different regions. This article contributes to the literature by examining the effect of dependency on the country of origin of a crisis, openness to international trade, and the role a country plays in the global trading network to explain the variation in the reach and the impact across countries. The article concludes with policy recommendations to avoid future economic contagions or reduce their impact. © 2011 Wiley Periodicals, Inc.