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Jörg Rocholl

Journal Article
Forthcoming

Do credit shocks affect labor demand? Evidence for employment and wages during the financial crisis

Journal of Financial Intermediation
Jörg Rocholl, Alexander Popov
Abstract:
Subject(s): Economics, politics and business environment, Finance, accounting and corporate governance
Keyword(s): Credit shocks, financial crisis, labor demand, employment, wages
JEL Code(s): D92, G01, G21, J23, J31

(Abstract from author's website.)


Journal Article
Forthcoming

What do a million observations have to say about loan defaults? Opening the black box of relationships

Journal of Financial Intermediation
Manju Puri, Jörg Rocholl, Sascha Steffen
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): Bank lending, relationship specific information, discretion, loan defaults, monitoring, screening
JEL Code(s): G20, G21

Using a unique dataset of more than 1 million loans made by 296 German banks, we evaluate the impact of many aspects of customer–bank relationships on loan default rates. Our research suggests a practical solution to reducing loan defaults for new customers: Have the customer open a simple transactions account – savings or checking account. Observe for some time and then decide whether to make a loan. Loans made under this model have lower default, as banks can use historical data about their borrowers to establish a baseline against which new client-related information can be evaluated. Banks assemble this historical information through relationships of different forms. We define relationships in many different ways to capture non-credit relationships, transaction accounts, as well as the depth and intensity of relationships, and find each of these can provide information that helps reduce default – even establishing a simple savings or checking account and observing the activity prior to loan granting can help reduce loan defaults. Our results show that banks with relationship-specific information act differently compared with banks that do not have this information both in screening and subsequent monitoring borrowers which helps reduce loan defaults.

With permission of Elsevier


Journal Article

Adverse incentives in crowdfunding

Management Science 63(3): 587–608
Thomas Hildebrand, Manju Puri, Jörg Rocholl (2017)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): Financial disintermediation, crowdfunding, consumer lending
JEL Code(s): G01, G20, G21, G23

This paper analyzes the substantially growing markets for crowdfunding, in which retail investors lend to borrowers without financial intermediaries. Critics suggest these markets allow sophisticated investors to take advantage of unsophisticated investors. The growth and viability of these markets critically depends on the underlying incentives. We provide evidence of perverse incentives in crowdfunding that are not fully recognized by the market. In particular we look at group leader bids in the presence of origination fees and find that these bids are (wrongly) perceived as a signal of good loan quality, resulting in lower interest rates. Yet these loans actually have higher default rates. These adverse incentives are overcome only with sufficient skin in the game and when there are no origination fees. The results from the analysis in this paper provide more general implications for crowdfunding, its structure and regulation.

© 2016 INFORMS

Volume 63
Issue 3
Pages 587–608

Journal Article

Staatsverschuldung: Privilegien des Staates auf dem Prüfstand [Sovereign debt: Analyzing state's privileges]

Wirtschaftsdienst 94(8): 560–563
Thiess Büttner, Kai Konrad, Jörg Rocholl (2014)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): Economic policy, labor economics, macroeconomics/monetary economics, social policy, European integration
JEL Code(s): E58, G38, H63
Volume 94
Issue 8
Pages 560–563

Journal Article

Politically connected boards of directors and the allocation of procurement contracts

Review of Finance 17(5): 1617–1648
Eitan Goldman, Jörg Rocholl, Jongil So (2013)
Abstract:
Subject(s): Economics, politics and business environment
Keyword(s): politics, corporate governance, boards, procurement contracts
JEL Code(s): G32, G34, G38
Volume 17
Issue 5
Pages 1617–1648

Journal Article

Corporate Governance von Banken

Zeitschrift für Bankrecht und Bankwirtschaft (ZBB) 5: 388–392
Jörg Rocholl (2012)
Abstract:

Journal Article

Wie wirkt sich der Wegfall staatlicher Garantien auf die Risikoübernahme von Banken aus?

ifo Schnelldienst 65(18): 17–21
Sascha Steffen, Markus Fischer, Christa Hainz, Jörg Rocholl (2012)
Abstract:
Subject(s): Finance, accounting and corporate governance
Volume 65
Issue 18
Pages 17–21

Journal Article

Bankenunion: Ist eine gemeinsame europäische Bankenaufsicht ein neues Instrument der Bankenrettung? [Bank union: Does common European bank supervision constitute a new bank bail-out instrument?]

ifo Schnelldienst 65(14): 3–25
Hans-Peter Burghof, Bernhard Speyer, Michael Kemmer, Jörg Rocholl, Georg Fahrenschon, Jörg Asmussen, Clemens Fuest (2012)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): international finance, government policy and regulation
Volume 65
Issue 14
Pages 3–25

Journal Article

The price of liquidity: The effects of market conditions and bank characteristics

Journal of Financial Economics 102(2): 344–362
Falko Fecht, Kjell G. Nyborg, Jörg Rocholl (2011)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): banks, liquidity, money markets, repos, imbalance, short squeezing, financial health, liquidity networks, state guarantees
JEL Code(s): G12, G21, E43, E58, D44

We study the prices individual banks pay for liquidity (captured by borrowing rates in repos with the central bank and benchmarked by the overnight index swap) as a function of market conditions and bank characteristics. These prices depend in particular on the distribution of liquidity across banks, which is calculated over time using individual bank level data on reserve requirements and actual holdings. Banks pay more for liquidity when positions are more imbalanced across banks, consistent with the existence of short squeezing. We also document that small banks pay more for liquidity and are more vulnerable to squeezes. Healthier banks pay less, but contrary to what one might expect, banks in formal liquidity networks do not. State guarantees reduce the price of liquidity, but do not protect against squeezes.

With permission of Elsevier

Volume 102
Issue 2
Pages 344–362

Journal Article

Global retail lending in the aftermath of the US financial crisis: Distinguishing between supply and demand effects

Journal of Financial Economics 100(3): 556–578
Manju Puri, Jörg Rocholl, Sascha Steffen (2011)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): bank lending channel, loan supply, consumer lending, credit rationing, relationships
JEL Code(s): G01, G21, F34

This paper examines the broader effects of the U.S. financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany using a unique dataset of German savings banks during the period 2006 through 2008 for which we have the universe of loan applications and loans granted. Our experimental setting allows us to distinguish between savings banks affected by the U.S. financial crisis through their holdings in Landesbanken with substantial subprime exposure and unaffected savings banks. The data enable us to distinguish between demand and supply side effects of bank lending and find that the U.S. financial crisis induced a contraction in the supply of retail lending in Germany. While demand for loans goes down, it is not substantially different for the affected and non-affected banks. More importantly, we find evidence of a significant supply side effect in that the affected banks reject substantially more loan applications than non-affected banks. This result is particularly strong for smaller and more liquidity-constrained banks as well as for mortgage as compared to consumer loans. We also find that bank-depositor relationships help mitigate these supply side effects.

With permission of Elsevier

Volume 100
Issue 3
Pages 556–578

Journal Article

The new game in town: Competitive effects of IPOs

The Journal of Finance 65(2): 495–528
Hung-Chia Hsu, Adam V. Reed, Jörg Rocholl (2010)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): IPOs, competitive effects, financial certification, knowledge capital

We analyze the effect of initial public offerings (IPOs) on industry competitors and provide evidence that companies experience negative stock price reactions to completed IPOs in their industry and positive stock price reactions to their withdrawal. Following a successful IPO in their industry, they show significant deterioration in their operating performance. These results are consistent with the existence of IPOrelated competitive advantages through the loosening of financial constraints, financial intermediary certification, and the presence of knowledge capital. These aspects of competitiveness are significant in explaining the cross-section of underperformance as well as survival probabilities for competing firms.

This article is protected by copyright. All rights reserved.

Volume 65
Issue 2
Pages 495–528

Journal Article

Der Fall Opel: Scheitert der staatliche Rettungsplan?

ifo Schnelldienst 62(23): 6–8
Jörg Rocholl (2009)
Abstract:
Subject(s): Economics, politics and business environment
Volume 62
Issue 23
Pages 6–8

Journal Article

Zurück zu alten Werten

Harvard Business Manager August: 50–51
Jörg Rocholl (2009)
Abstract:
Subject(s): Finance, accounting and corporate governance
Issue August
Pages 50–51

Journal Article

Do politically connected boards affect firm value?

Review of Financial Studies 22(6): 2331–2360
Eitan Goldman, Jörg Rocholl, Jongil So (2009)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): Politics, boards, corporate governance
JEL Code(s): G30, G34, G38
Volume 22
Issue 6
Pages 2331–2360

Journal Article

Ein spannendes Feld - Private Equity: Wo steht die Forschung?

VentureCapital Magazin 5: 78–79
Jörg Rocholl (2009)
Abstract:
Subject(s): Finance, accounting and corporate governance
Issue 5
Pages 78–79

Journal Article

A friend in need is a friend indeed: Allocation and demand in IPO bookbuilding

Journal of Financial Intermediation 18(2): 284–310
Jörg Rocholl (2009)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): banking, IPO, bookbuilding, underwriting
JEL Code(s): G21, G24, G30

This paper uses proprietary data on European IPOs with detailed information on the demand at different points of time and allocation for institutional and retail investors. The nature of the data allows us to analyze the reason of why institutional investors as a group get more allocations of underpriced issues than retail investors. By explicitly examining institutional and retail demand for different kinds of stocks, we find that this is due to institutional investors' superior ability to detect underpriced stocks rather than the underwriter's preferential treatment. At the same time, the subset of domestic institutional investors supports the underwriter in issues with weak demand and receives in turn favorable allocations in underpriced issues.

With permission of Elsevier

Volume 18
Issue 2
Pages 284–310

Journal Article

Corporate Governance und Internationale Kapitalmärkte

Zeitschrift für betriebswirtschaftliche Forschung (ZfbF) 61(February): 114–123
Jörg Rocholl (2009)
Abstract:
Subject(s): Economics, politics and business environment, Finance, accounting and corporate governance
Volume 61
Issue February
Pages 114–123

Journal Article

On the importance of retail banking relationships

Journal of Financial Economics 89(2): 253–267
Jörg Rocholl, Manju Puri (2008)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): banking, retail, relationships, cross-selling, underwriting
JEL Code(s): G21, G24, G30

We use proprietary data to analyze the importance of retail banking relationships to commercial banks and their depositors when banks underwrite securities. We find lead underwriters' retail customers benefit as they demand and end up with significantly more of the highly underpriced issues. We find it is actual underpricing beyond that predicted by grey markets that drive the differential demand from the lead bank retail clientele, suggesting that banks pass on information about underpriced initial public offerings to their retail depositors. We analyze banks' incentives for such behavior and find evidence of banks benefiting through retail cross-sellingâ€Â"both brokerage accounts and consumer loans increase significantly.

With permission of Elsevier

Volume 89
Issue 2
Pages 253–267

Journal Article

Liquidity management and overnight rate calendar effects: Evidence from German banks

North American Journal of Economics and Finance 19(1): 7–21
Falko Fecht, Kjell G. Nyborg, Jörg Rocholl (2008)
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): reserve requirements, liquidity, overnight rates, banking

We document a general pattern in the euro area overnight interbank rate (EONIA) and analyze how German banks compared to other EMU banks respond to these predictable changes in the price for reserve holdings. At the beginning of the maintenance period, when the EONIA is typically above average, we observe that German banks hold substantially less reserves than their daily average required reserves. Thus in contrast to other EMU banks, German banks back load the fulfillment of their reserve requirements over the reserve maintenance period and thereby benefit from the general pattern in the EONIA. Looking at the disaggregate data we find than this is particularly the case for the Landesbanks.We argue that the end of the calender month effect in the EONIA may be driven by a temporary shortage of liquidity, relative to reserve requirements, at the beginning of the maintenance period (which coincides with the end of the calendar month).

With permission of Elsevier

Volume 19
Issue 1
Pages 7–21