with Roger Stover (Iowa State) and Oleksandr Zhylyevskyy (Iowa State)

Empirical research on how deposit insurance affects the depositor response to a banking crisis is typically performed in the context of a single country's deposit insurance system. As such, it is silent on whether depositors domiciled in different countries may assign different importance to identical deposit insurance features. We investigate the possibility by applying a conjoint analysis approach to study how a multinational sample of finance professionals react to news of a hypothetical banking crisis. The approach enables us to explore a range of possible configurations of deposit insurance, including those that may be of interest to regulators but untried in practice. Our respondents, regardless of the country of residence, seem to lack complete confidence in deposit insurance: they intend to make withdrawals from fully-insured deposit accounts and withdraw more than just the uninsured amount from partially-insured accounts. However, generous deposit insurance does help stabilize banks during a banking crisis, though its impact varies somewhat with the respondent's country of residence.

with Hendrik Kimmerle and Tian Luan

Working Paper

This study provides evidence on the existence of a green bond premium and adds to the understanding on the role of Second Party Opinions (SPO) in the green bond market. First, we report a significant negative green bond premium of --8 basis points. We show that the on average negative premium is driven by green bonds denominated in Euro, whereas USD denominated bonds yield a positive premium of +9 basis points. Next, we show that SPO has no impact on the green bond premium when the issuer's environmental performance is high; whereas SPO has a significant negative impact on the green bond premium when the issuers environmental performance is low. Since environmental performance is approximated by the environmental pillar of a firms ESG score, we interpret the results such that the SPO label and the ESG score are competing monitoring channels, whilst taking on different roles. As such, the ESG score indicates the firms overall environmental performance, whereas the SPO evaluates the specific project for which the green bond is issued.

with Hendrik Kimmerle and Tian Luan

Working Paper

Investors consider ESG factors in their investment process to mitigate sustainability risks. While research predominantly focuses on the impact of ESG on risk and performance, the relation between the single constituents on the corporate level is neglected. This study decomposes ESG scores and sheds light on the influence of effective governance on corporate social performance (CSP). Our results are twofold: First, we report a statistically significant positive relation between effective corporate governance and CSP for our global as well as for regional subsamples. This holds true for all components of CSP. Second, we report a statistically positive relation between effective governance and the exposure to controversies, which is against our expectation and leads us to further investigate this relationship.