Cultural Proximity and Loan Outcomes

• 成果类型: Article
• 署名作者: Fisman, Raymond; Paravisini, Daniel; Vig, Vikrant
• 署名单位: Boston University; National Bureau of Economic Research; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; University of London; London Business School; Centre for Economic Policy Research - UK
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20120942
• 发表日期: 2017
• 页码: 457-492
• 关键词: SOCIAL CONNECTIONS; DISCRIMINATION; credit; incentives; ECONOMICS; wages

摘要

We present evidence that cultural proximity (shared codes, beliefs, ethnicity) between lenders and borrowers increases the quantity of credit and reduces default. We identify in-group lending using dyadic data on religion and caste for officers and borrowers from an Indian bank, and a rotation policy that induces exogenous matching between them. Having an in-group officer increases credit access and loan size dispersion, reduces collateral requirements, and induces better repayment even after the in-group officer leaves. We consider a range of explanations and suggest that the findings are most easily explained by cultural proximity serving to mitigate information frictions in lending.