Discriminatory Lending: Evidence from Bankers in the Lab

Ralph De Haas and J. Michelle Brock

No 14340, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We implement a lab-in-the-field experiment with 334 Turkish loan officers to document gender discrimination in small business lending and to unpack the mechanisms at play. Each officer reviews multiple real-life loan applications in which we randomize the applicant's gender. While unconditional approval rates are the same for male and female applicants, loan officers are 26 percent more likely to require a guarantor when we present the same application as coming from a female instead of a male entrepreneur. A causal forest algorithm to estimate heterogeneous treatment effects reveals that this discrimination is strongly concentrated among young, inexperienced, and gender-biased loan officers. Discrimination mainly affects female loan applicants in male-dominated industries, indicating how financial frictions can perpetuate entrepreneurial gender segregation across sectors.

Keywords: Gender bias; Bank credit; Implicit association test; Lab-in-the-field; Causal forest (search for similar items in EconPapers)
JEL-codes: D81 D83 D91 G21 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-exp and nep-gen
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cepr.org/publications/DP14340 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Discriminatory Lending: Evidence from Bankers in the Lab (2023)
Working Paper: Discriminatory Lending: Evidence from Bankers in the Lab (2021)
Working Paper: Discriminatory Lending: Evidence from Bankers in the Lab (2021)
Working Paper: Discriminatory Lending: Evidence from Bankers in the Lab (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14340

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14340

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().