Can a Common Currency Foster a Shared Social Identity across Different Nations? The Case of the Euro

Fostering the emergence of a "European identity" was one of the declared goals of the euro adoption. Now, years after the physical introduction of the common currency, we assess whether there has been an effect on a shared European identity. We use two different datasets in order to assess the impact of the euro adoption on the fostering of a self-declared "European Identity". We find that the effect of the euro is statistically insignificant although it is precisely estimated. This result holds important implications for European policy makers. It also sheds new light on the formation of social identities.

Religion and returns in Europe

Drawing on social identity and social impact theory, this paper is the first to investigate the impact of religious preferences on share prices and expected returns at the country level. Using data from 12 European countries, our findings suggest that religion has a significant effect on the share price of companies whose activities are considered unethical, i.e., tobacco manufacturers and alcohol producers. The share price of these companies (called sin stocks) is depressed when they are located in a predominantly Protestant environment (relative to a Catholic environment). With investors in Protestant countries being more sin averse than in Catholic countries, they insist upon higher expected returns on sin stocks. Conversely, religious preferences do not have the same impact on the performance of other companies, e.g. socially responsible companies. Our results are robust to various methodologies and controlling for several firm-specific, industry-specific and country-specific characteristics.