Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130762
Authors: 
Haselmann, Rainer
Schoenherr, David
Vig, Vikrant
Year of Publication: 
2016
Series/Report no.: 
SAFE Working Paper Series 132
Abstract: 
We employ a unique dataset on members of an elite service club in Germany to investigate how 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 state-owned banks engaging most actively in crony lending. The aggregate cost of credit misallocation amounts to 0.13 percent of annual GDP. Our findings, thus, resonate with existing theories of elite networks as rent extractive coalitions that stie economic prosperity.
JEL: 
F34
F37
G21
G28
G33
K39
Document Type: 
Working Paper

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