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We examine the relative efficiency performance of the Islamic Bank of Britain (IBB)

This paper examines the driver of the 52-week high strategy, which is long in stocks close to their 52-week high price and short in stocks with a price far below their one-year high, and tests the hypothesis that this strategy's profitability can be explained by anchoring-a behavioral bias. To test the null, we examine whether the 52-week high criterion has more predictive power in cases of larger information uncertainty. This hypothesis is based on the psychological insight that behavioral biases increase in uncertainty. For six proxies of ambiguity, we document a positive relationship to returns of 52-week high winner stocks and a negative relationship to returns of 52-week high loser stocks. The opposite effect of information uncertainty on winner and loser stocks implies that the 52-week high profits are increasing in uncertainty measures. Moreover, the study documents that the six variables have a similar impact on momentum profits. Hence, we cannot reject the hypothesis that anchoring explains the profits of the 52-week high strategy and that it is the driver of the momentum anomaly.

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We analyze the effect of state subsidies on early stage investments. In a two‐period investment model with incomplete stage financing contracts, we describe optimal and second‐best investment levels. Optimality depends on external effects: given that private early stage financing generates positive external effects, the subsidies might be designed to use scarce state money most efficiently to mobilize private investment capital. However, a subsidy might also contribute to greater efficiency of the contractual relationship itself without regard to external effects. Refinancing subsidies can be optimal under both perspectives and are always optimal under last of the two approaches. The comparison of the main types of subsidies, i.e. refinancing subsidies, guarantees and direct investments, speaks against the use of guarantees. Finally, we show that our results do also hold if some investors (e.g. venture capitalists) have a superior screening capability.Early Stage Financing, State Subsidies, Investment Decision, Venture Capital, G24, G32, H23,

Financial integration is seen as a major driver of economic growth and wealth. Its effects on income inequality have been analyzed for the bank branch deregulation in the USA and foreign bank entry in India. Another prominent example of financial integration and liberalization, so far, has been ignored: the introduction and progression of the European Single Market. By using a difference-in-difference design, we investigate the effects of the Single Banking License introduced in 1993 on economic growth and several inequality measures. This directive abolished any cross-country restrictions on banks in EU Member States and allowed them to freely branch into other Member States. This constitutes a fundamental change in the competitive environment of financial markets. We show that the European Single Financial Market positively influenced economic growth across a variety of subsamples of EU Member States. The effects on income inequality indicate that inequality across states was reduced. Additional regressions with the unemployment rate and top and bottom 20% income shares support this finding and show a reduction of unemployment in previously less developed countries accompanied by an increase in the bottom income shares across all Member States. (JEL codes: D63, E44, G21 and O11).

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