I am very grateful to Christa Magerl for excellent research assistance and Maryam Alemi for linguistic support. Many thanks also go to my colleague Dieter Pennerstorfer and to Günter Emberger, Vienna University of Technology, for selflessly providing much needed assistance in computing geographical distances. The same applies to three anonymous referees for very helpful comments and suggestions. The latter have unintentionally given rise to an unusual joint venture between economics and onomastics. Hence, my thanks particularly go to onomasticians Angela Bergermayer and Axel Linsberger, who have been quite responsive to my suggestion to take an active part in a promising but still uncertain undertaking called ‘economics meets onomastics’. Finally, I express my special gratitude to two persons to whom I am indebted for helping me to publish this study. Wouter J. Den Haan, editor in charge, deserves special thanks for his editorial guidance and Gunther Tichy for his invaluable suggestions and encouragement on this study (and, beyond that, for his generous support of many of my research activities). Research support from the Anniversary Fund of the Oesterreichische Nationalbank (project number 13382) is gratefully acknowledged. The usual disclaimer applies.
Culture, Geography and Institutions: Empirical Evidence from Small-scale Banking
Article first published online: 25 JUL 2013
© 2013 The Author(s). The Economic Journal © 2013 Royal Economic Society
The Economic Journal
How to Cite
Hahn, F. R. (2013), Culture, Geography and Institutions: Empirical Evidence from Small-scale Banking. The Economic Journal. doi: 10.1111/ecoj.12048
- Article first published online: 25 JUL 2013
- Accepted manuscript online: 11 APR 2013 04:32AM EST
- Manuscript Accepted: 14 JAN 2013
- Manuscript Received: 19 DEC 2011
- Anniversary Fund of the Oesterreichische Nationalbank. Grant Number: 13382
In this article, I explore one of the channels through which culture may directly affect economic activities. I find evidence that common cultural heritage has a statistically and economically significant effect on cross-border bank loans (even after geographical closeness and institutional convergence have been taken into account) flowing from Austria's local and regional banks to clients residing in one of the neighbouring Eastern European EU member states. To compile formal statistical evidence that common culture plays a role in cross-border bank lending, I developed a new instrument of cultural distance that measures Austria's cultural proximity to its neighbouring Eastern European countries.