Gabrielle Wanzenried

Determinants of Bank Profitability Before and During the Crisis: Evidence from Switzerland

Using the GMM estimator technique described by Arellano and Bover (1995), this paper analyzes the profitability of 372 commercial banks in Switzerland over the period from 1999 to 2009. To evaluate the impact of the recent financial crisis, we separately consider the pre-crisis period, 1999-2006, and the crisis years of 2007-2009. Our profitability determinants include bank-specific characteristics as well as industry-specific and macroeconomic factors, some of which have not been considered in previous studies. The inclusion of these additional factors as well as the separate consideration of the crisis years allow us to gain new insights into what determines the profitability of commercial banks.

Capital structure decisions and output market competition under demand uncertainty

Abstract We consider a two-stage differentiated goods duopoly model with demand uncertainty linking firms’ capital structure choice with their output market decisions. The firms compete in quantities or prices on the market. We explain how firms’ capital structure depends on specific output market characteristics such as substitutability between products and demand volatility. We investigate whether strategic use of debt is able to mimic Stackelberg leadership. Finally, we consider the welfare effects of debt issue. This paper contributes to the understanding of the firms’ capital structure decisions, while specifically emphasizing the strategic use of debt. It investigates the relationships between firms’ output market and capital structure decisions with respect to specific demand and supply characteristics.

Firm Characteristics, Economic Conditions and Capital Structure Adjustment

We use a dynamic framework and panel methodology to investigate the NEWLINE determinants of a firms’ time-varying capital structure. Our sample comprises NEWLINE 706 European firms from France, Germany, Italy and the U.K. over NEWLINE the period from 1983 to 2002. If capital structure adjustment is costly, firms NEWLINE may deviate temporarily from their target debt ratios. Therefore, we endogenize NEWLINE the adjustment process and analyze the impact of firm-specific NEWLINE characteristics as well as macroeconomic factors on the speed of adjustment NEWLINE towards target leverage. We find that larger and faster growing firms as well NEWLINE as firms that are further away from their targets adjust more readily. Additionally, NEWLINE we document interesting relations between well-known business NEWLINE cycle variables and the adjustment speed. In a nutshell, firms adjust faster in NEWLINE favorable macroeconomic conditions, e.g. if interest rates are low and the NEWLINE risk of disruptions in the global financial system are negligible. We also NEWLINE document that capital structure decision are largely determined by financial NEWLINE constraints. Finally, we shed new light on the interdependence between NEWLINE book value based and market value based measures of leverage as well as on NEWLINE capital structure rebalancing issues.

Why are Net-Interest Margins Across Countries so Different?

In this study, we use panel data from 121 countries over the period 1999-2012 to provide new evidence regarding why bank margins differ across countries. More specifically, we test whether, and, if so, by how much, country-level governance variables and bank-specific factors explain the net-interest margins over time. We find that both bank-specific factors and country-level governance variables are important determinants of the interest margins. We also investigate whether these determinants vary by the level of economic development by analyzing developed and developing countries separately. We find significant differences in the determinants of margins between developed and developing countries.

The Evolution of Physician Density in Switzerland

SummaryOur paper investigates the geographical distribution of physicians across the Swiss cantons over the years 1960 to 2005. We use a physician location model relating physician growth in a canton related to (i) the existing number of physicians in an area, (ii) commonly used determinants of the demand for physician services such as population growth, per capita income and age, and (iii) factors that determine the medical infrastructure of an area, i.e. the number of hospital beds and the existence of a university hospital. We analyze the effects separately for general practitioners and specialists and find that the two physician types react differently to certain factors included in our analysis.

Financial Literacy and Pension Planning – A Comparative Study for Austria and Switzerland

This paper analyzes the impacts of financial literacy on pension planning in Austria and Switzerland. Based on survey data of 442 individuals, we explain the pension planning behavior by the level of financial literacy as well as other relevant person- and country-specific characteristics considering in particular the differences between the Austrian and the Swiss population in terms of financial literacy, contextual and socio-demographic aspects. Our results show that higher financial literacy has a clear positive impact on the level of pension planning, whereas the Swiss population is demonstrated to be more financially literate and thus better prepared for the retirement than Austrians. The same holds for elder people compared to the younger persons and men compared to women in our sample. Overall, our results provide some potentially interesting insights on the impacts of institutional differences and financial literacy on pension planning and appear to be highly relevant in light of demographic and system changes as well as the micro- and macro-economic relevance of pension savings in both countries.