Replication data for: Cultural Proximity and Loan Outcomes
Principal Investigator(s): View help for Principal Investigator(s) Raymond Fisman; Daniel Paravisini; Vikrant Vig
Version: View help for Version V1
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Project Citation:
Fisman, Raymond, Paravisini, Daniel, and Vig, Vikrant. Replication data for: Cultural Proximity and Loan Outcomes. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112886V1
Project Description
Summary:
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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.
Scope of Project
JEL Classification:
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D82 Asymmetric and Private Information; Mechanism Design
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
G28 Financial Institutions and Services: Government Policy and Regulation
O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Z12 Cultural Economics: Religion
Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
D82 Asymmetric and Private Information; Mechanism Design
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
G28 Financial Institutions and Services: Government Policy and Regulation
O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Z12 Cultural Economics: Religion
Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
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