Seminars

In this paper (joint with David Schoenherr), we document that networks that gain access to political power also gain control over the resource allocation in the private sector. Using micro-level data on bank loans, firm financials, and CEOs, and exploiting variation in network links for the same firm across lenders before and after the Korean presidential election in 2007, we find that firms whose CEOs share the same alumni network (Korea University) as the president received more credit at a lower rate from both government and private banks, relative to firms whose CEOs are not from KU, despite higher default rates. While the prior literature treats cronyism in the government and private sectors as independent sources of inefficiencies (i.e., Khwaja and Mian 2005), we show that, in fact, cronyism in both sectors is linked in a way that drastically amplifies allocative distortions.

* 본 세미나는 SNU-UC San Diego joint webinar로 다음의 링크에서 신청 후 참가하실 수 있습니다. (신청링크)

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