The Household Savings Paradox, with Tobias Meyll and Andreas Walter.
2018: Eastern Finance Association Annual Meeting, Philadelphia   |    SGF, Zürich   |    VHB, Magdeburg   |   EFMA, Milan

Abstract - This study investigates why many households rely solely on deposits and avoid investments in both the stock market and in contractual savings and retirement products. These households forgo the equity risk-premium and state subsidies associated with virtually risk-free products developed for old-age provision. Furthermore, as these households earn negligible, and recently, even negative inflation-adjusted returns, we call this phenomenon the ‘household savings paradox’. Our results show that financial literacy and financial advice strongly decrease the likelihood to save paradoxically. Unlike financial literacy and financial advice, we find that other common factors of stock market non-participation, including participation costs, liquidity needs, life-cycle motives, and negative experiences made during the financial crisis, fail to explain why households rely solely on deposits. Our results therefore emphasize the relevance of financial literacy and financial advice for sound financial decision-making.


The Annual General Meeting revisited: The role of the CEO speech, with Christina Bannier and Andreas Walter.
2019: EFL Seminar, Frankfurt
2017: Verein für Socialpolitik, Vienna   |   DAFC, Lugano   |   VHB, Luzern 
2016: DGF PhD Workshop, Bonn

Abstract - We analyze the informational value of the Annual General Meeting
(AGM) for investors’ decision-making. As the AGM is typically preceded by
several information disclosures, previous research has shown it to trigger only a
marginal market reaction. We consider the tone of the CEO’s speech as a hitherto
overlooked feature using textual analysis and compile a unique comprehensive
dataset of 457 German AGMs between 2008 and 2016. We show that the
sentiment of the CEO speech is significantly related to subsequent return reactions
and firm profitability, even when controlling for further AGM-related events.
 


Trust and the supply side of financial advice, with Oscar Stolper and Andreas Walter. 
2016: World Finance Conference, New York 
2015: Deutsche Gesellschaft für Finanzwirtschaft (DGF) PhD Workshop, Leipzig

Abstract - In this study, we investigate how two key dimensions of trust formation, i.e. interpersonal trust in the advisor (narrow-scope trust) and broader trust in the business context in which the advisor operates (broad-scope trust), impact households’ overall trust in financial advice. To capture the potential influence of broad-scope trust, we make use of novel survey data obtained from the Panel on Household Finances (PHF) and contrast households’ propensity to trust financial advice provided by advisors employed at community banks versus large banks, which have been shown to feature fundamentally different trust profiles. We document that financial advice provided by large-bank advisors is significantly less likely to be trusted, thus rejecting the notion that trust in financial advice is essentially equivalent to trusting one’s financial advisor. Instead, we provide strong evidence in support of an integrated conceptualization of clients’ trust in financial advice, which highlights the importance of establishing broad-scope trust.