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Incompatible European Partners? Cultural Predispositions and Household Financial Behavior

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Listed:
  • Haliassos, Michael
  • Jansson, Thomas
  • Karabulut, Yigitcan

Abstract

The Eurozone fiscal crisis has created pressure for institutional harmonization, but skeptics argue that cultural predispositions can prevent convergence in behavior. Our paper derives a robust cultural classification of European countries and utilizes unique data on natives and immigrants. Classification based on genetic distance or on Hofstede’s cultural dimensions fails to identify a single ‘southern’ culture but points to a ‘northern’ culture. Our findings support the relevance of cultural predispositions for financial behavior; and convergence of behavior over time in the face of common institutions, even for countries with great cultural distance from the country that created those institutions.

Suggested Citation

  • Haliassos, Michael & Jansson, Thomas & Karabulut, Yigitcan, 2014. "Incompatible European Partners? Cultural Predispositions and Household Financial Behavior," CEPR Discussion Papers 10039, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10039
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    References listed on IDEAS

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    Cited by:

    1. Asgharian, Hossein & Liu, Lu & Lundtofte, Frederik, 2014. "Institutional Quality, Trust and Stock-Market Participation: Learning to Forget," Working Papers 2014:39, Lund University, Department of Economics.
    2. Cristian Badarinza & John Y. Campbell & Tarun Ramadorai, 2016. "International Comparative Household Finance," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 111-144, October.
    3. Luik, Marc-André & Steinhardt, Max Friedrich, 2016. "Immigrant-native differences in stockholding – The role of cognitive and non-cognitive skills," Journal of Empirical Finance, Elsevier, vol. 38(PA), pages 103-119.

    More about this item

    Keywords

    culture; household finance; household portfolios; institutions;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Z1 - Other Special Topics - - Cultural Economics

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