TY - JOUR
T1 - Experience of communal conflicts and intergroup lending
AU - Fisman, Raymond
AU - Sarkar, Arkodipta
AU - Skrastins, Janis
AU - Vig, Vikrant
N1 - Publisher Copyright:
© 2020 by The University of Chicago.
PY - 2020/9/1
Y1 - 2020/9/1
N2 - We provide microeconomic evidence on ethnic frictions and market efficiency, using dyadic data on managers and borrowers from a large Indian bank. We conjecture that, if exposure to religion-based communal violence intensifies intergroup animosity, riot exposure will lead to lending decisions that are more sensitive to a borrower’s religion. We find that riot-exposed Hindu branch managers lend relatively less to Muslim borrowers and that these loans are less likely to default, consistent with riot exposure exacerbating taste-based discrimination. This bias is persistent across a bank officer’s tenure, suggesting that the economic costs of ethnic conflict are long-lasting, potentially spanning across generations.
AB - We provide microeconomic evidence on ethnic frictions and market efficiency, using dyadic data on managers and borrowers from a large Indian bank. We conjecture that, if exposure to religion-based communal violence intensifies intergroup animosity, riot exposure will lead to lending decisions that are more sensitive to a borrower’s religion. We find that riot-exposed Hindu branch managers lend relatively less to Muslim borrowers and that these loans are less likely to default, consistent with riot exposure exacerbating taste-based discrimination. This bias is persistent across a bank officer’s tenure, suggesting that the economic costs of ethnic conflict are long-lasting, potentially spanning across generations.
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U2 - 10.1086/708856
DO - 10.1086/708856
M3 - Article
AN - SCOPUS:85089134085
SN - 0022-3808
VL - 128
SP - 3346
EP - 3375
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 9
ER -