New GLOBUS Working Paper on Eurozone Cross-Border Depositing
GLOBUS researchers Harald Sander, Stefanie Kleimeier and Sylvia Heuchemer have published their latest work on International Finance and Culture in the GLOBUS Publication Series. Comments are welcome!
GLOBUS researchers Harald Sander, Stefanie Kleimeier and Sylvia Heuchemer have published their latest work on International Finance in a GLOBUS Working Paper: "The Resurgence of Cultural Borders in International Finance during the Financial Crisis: Evidence from Eurozone Cross-Border Depositing".
In the paper, they demonstrate that cultural borders in international finance resurge during financial crises. To investigate the role of cultural borders during both tranquil and crisis periods, they employ a unique data set that focuses on Eurozone cross-border depositing in a gravity-model framework. They provide evidence that cultural distance limits international financial integration. However, cultural borders lost influence during a “Europhoria” phase after the introduction of the Euro notes in 2002, indicating that confidence in the new currency helps to overcome cultural borders. In contrast, cultural borders have severely limiting effects during crisis periods.
July 2014