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|Abstract:||© 2018 by The University of Chicago. All rights reserved We employ a unique data set 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 prosperityth 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.|
|Citation:||Haselmann, R, Schoenherr, D, Vig, V. (2018). Rent seeking in elite networks. Journal of Political Economy, 126 (4), 1638 - 1690. doi:10.1086/697742|
|Pages:||1638 - 1690|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||Journal of Political Economy|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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