Research
Research
Cash me if you can: ATM explosions, payment choice, and consumption
with Esad Smajlbegovic, Daniel Urban, and Michael Weber
Abstract: We study the consumption effects of a shift from cash to card payments exploiting 275 explosive attacks on ATMs, which provide plausibly exogenous variation in the availability of cash. Using home scan data, we find households increase their consumption by 2.3\% after an ATM in their vicinity is attacked. Purchases of more expensive, branded products, and temptation goods drive the increase in spending, and the effect largely dissipates after 3 months. Payment diaries from survey data suggest a significant long-term rise in card payments following explosive attacks. The results are consistent with short-term overspending as consumers transition to digital payments.
Presented at: Alpine Finance Summit 2025, European Finance Association Paris 2025, Kentucky Finance Conference 2025, Lapland Household Finance Summit 2025, Annual Meeting of the Swiss Society for Financial Market Research, Frankfurt School of Finance & Management, and Technical University of Munich.
with Samuli Knüpfer and Elias Rantapuska
Abstract: People often cite family and friends as important sources of financial advice. We study the impact of this social financial advice by using comprehensive administrative data on social networks and an identification strategy leveraging job switches to financial advisor roles. Gaining access to social financial advice significantly increases stock market participation. This effect declines in social distance, persists across socioeconomic groups, is absent for safe assets, and does not extend to other finance professionals. Our results are consistent with complementarity of investment expertise with client-facing skills being essential for advisors to successfully convert their social connections into investors.
Presented at: Aalto University, Aarhus University, BI Norwegian Business School, CFA Society Finland, FIRS Berlin, EFA Amsterdam, Luxembourg Household Finance Conference, Nordic Finance Network, St. Gallen Financial Economics Workshop, Svenska Handelsbanken, Tallinn University of Technology, University of Jyväskylä, University of Oulu, University of Vaasa, and Vienna University of Economics and Business.
with Vidhan K. Goyal, Daniel Schmidt, and Daniel Urban
Abstract: Exploiting the creation of 55 equity indexes in 30 countries, we find that passive ownership raises environmental scores and reduces greenhouse gas emissions, particularly in carbon-intensive firms. We document a demand-elasticity channel: higher passive ownership makes stock demand more inelastic, dampens stock price reactions to earnings news, and allows firms to pursue green investments. Effects are strongest in countries with higher costs for green projects and greater climate risks. Visibility or investor engagement are unlikely to explain the results. Ultimately, passive ownership curbs emissions by giving firms freedom to invest in costly environmental upgrades.
Presented at: 2024 SGF Conference, CEPR Advanced Forum in Financial Economics, HEC-HKUST Workshop on Impact and Sustainable Finance, PRI research seminar, Erasmus University Rotterdam.
with Gesa-Kristina Petersen
Abstract: Financial markets and economic conditions induce stress, but does stress, in turn, have a causal effect on investor behavior and markets? We analyze this question in bubble-prone experimental asset markets with 492 participants. We induce acute stress, measured with cortisol levels, heart rates, and self-assessments. We find that stressed markets herd more and develop prolonged price bubbles, although bubble magnitude remains unaffected. Markets with financially literate investors exhibit less herding under stress. Our findings are in line with investors seeking conformity under stress. We find no evidence that willingness to take risks or cognitive performance drives our results
Presented at: Rotterdam Behavioral Finance Conference 2022 (Poster); Central Nordic Finance Seminar, 2022; European Finance Association (EFA), Oslo 2016; Annual Meeting of Empirical Asset Pricing, Kiel 2016; Experimental Finance, Nijmegen 2015; Boulder Summer Conference 2015 (Poster); Seminars: University of Münster 2015, Aalto University 2018.
Abstract: Early life experiences and interventions are formative for later life economic and financial behavior. I show that financial socialization of children through pocket money payments increases financial market participation. The effect is long lived and stronger for children with less exposure to local banking services during childhood. Pocket money increases financial market participation likely by increasing financial literacy and trust in financial institutions. The findings suggest a simple, yet effective tool to raise children to become investors.
Presented at: Aalto University, Bayes Business School, Lund University, Stockholm University, NFN Young Scholars Workshop, University of Amsterdam.
with Torsten Jochem