Rent-seeking in elite networks

Haselmann, R, Schoenherr, D and Vig, V (2018) Rent-seeking in elite networks. Journal of Political Economy, 126 (4). pp. 1338-1690. ISSN 0022-3808

Abstract

We employ a unique dataset 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 prosperity.

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Item Type: Article
Subject Areas: Finance
Additional Information: © 2018 University of Chicago
Funder Name: LOEWE Zentrum AdRIA
Subjects: C > Credit management
S > Social classes
R > Resource allocation
Date Deposited: 24 May 2018 14:37
Last Modified: 16 Feb 2019 06:31
URI: http://lbsresearch.london.edu/id/eprint/977
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