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Incompatible European partners? Cultural predispositions and household financial behavior

Author

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  • Haliassos, Michalis
  • 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, Michalis & Jansson, Thomas & Karabulut, Yigitcan, 2015. "Incompatible European partners? Cultural predispositions and household financial behavior," SAFE Working Paper Series 58, Leibniz Institute for Financial Research SAFE, revised 2015.
    • Handle: RePEc:zbw:safewp:58
    DOI: 10.2139/ssrn.2462056
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    More about this item

    Keywords

    Household Portfolios; Household Finance; Culture and Institutions;
    All these keywords.

    JEL classification:

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

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