DP10039 Incompatible European Partners? Cultural Predispositions and Household Financial Behavior
|Author(s):||Michael Haliassos, Thomas Jansson, Yigitcan Karabulut|
|Publication Date:||June 2014|
|Keyword(s):||culture, household finance, household portfolios, institutions|
|JEL(s):||E21, G11, Z1|
|Programme Areas:||Financial Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=10039|
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.