TY - JOUR
T1 - Rent seeking in elite networks
AU - Haselmann, Rainer
AU - Schoenherr, David
AU - Vig, Vikrant
N1 - Funding Information:
We would like to thank Oriana Bandiera, Patrick Bolton, James Dow, Armin Falk, Neal Galpin, Tarek Hassan, Christian Hellwig, Ginger Zhe Jin, Matti Keloharju, Michael Kosfeld, Jan Krahnen, Samuli Knüpfer, Stefan Lewellen, Christopher Malloy, Ulrike Malmendier, Jean- MarieMeier, AtifMian, Jörn-Steffen Pischke, Ailsa Roell, Stephen Schaefer, Kelly Shue, Rui Silva, Jan Starmans, David Thesmar, Alexander Wagner, Ivo Welch, and Luigi Zingales, as well as seminar and conference participants in Amsterdam, Berlin (Humboldt University), and Bonn, at the European Winter Finance summit, in Frankfurt, Glasgow, Helsinki, and Mainz, at the National Bureau of Economic Research, London Business School, London School of Economics, Stockholm School of Economics, the University of Warwick, the Swiss Finance Association, and theWestern Finance Association for their helpful comments.We are grateful to the Deutsche Bundesbank, especially to Klaus Düllmann and Thomas Kick, for their generous support with the construction of the data set. Haselmann thanks the Research Center SAFE, funded by the State of Hessen initiative for research LOEWE, for financial support. The empirical analysis in the paper uses proprietary data from Deutsche Bundesbank, which is stored on-site in the headquarters of Deutsche Bundesbank in Frankfurt, Germany.
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 -