Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149751
Authors: 
Haselmann, Rainer
Schoenherr, David
Vig, Vikrant
Year of Publication: 
2017
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 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.
JEL: 
F34
F37
G21
G28
G33
K39
Document Type: 
Working Paper

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