TY - JOUR
T1 - Rent seeking in elite networks
AU - Haselmann, Rainer
AU - Schoenherr, David
AU - Vig, Vikrant
N1 - Publisher Copyright:
© 2018 by The University of Chicago. All rights reserved
PY - 2018/8/1
Y1 - 2018/8/1
N2 - We employ a unique data set on members of an elite service club in Germany to investigate how social connections in elite networks affect the allocation of resources. Specifically, we investigate credit allocation decisions of banks to firms inside the network. Using a quasi-experimental research design, we document misallocation of bank credit inside the network, with bankers with weakly aligned incentives engaging most actively in crony lending. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stifle economic prosperityth weakly aligned incentives engaging most actively in crony lending. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stifle economic prosperity.
AB - We employ a unique data set on members of an elite service club in Germany to investigate how social connections in elite networks affect the allocation of resources. Specifically, we investigate credit allocation decisions of banks to firms inside the network. Using a quasi-experimental research design, we document misallocation of bank credit inside the network, with bankers with weakly aligned incentives engaging most actively in crony lending. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stifle economic prosperityth weakly aligned incentives engaging most actively in crony lending. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stifle economic prosperity.
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U2 - 10.1086/697742
DO - 10.1086/697742
M3 - Article
AN - SCOPUS:85047817311
SN - 0022-3808
VL - 126
SP - 1638
EP - 1690
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 4
ER -