Discriminatory Lending: Evidence from Bankers in the Lab

J. Michelle Brock and Ralph De Haas

American Economic Journal: Applied Economics, 2023, vol. 15, issue 2, 31-68

Abstract: We implement a lab-in-the-field experiment with 334 Turkish loan officers to document gender discrimination in small business lending and unpack mechanisms. Officers review multiple real-life loan applications in which we randomize applicant gender. While unconditional approval rates are the same, 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 discrimination is concentrated among young, inexperienced, and gender-biased officers. Discrimination mainly affects female loan applicants in male-dominated industries, indicating how financial frictions can perpetuate entrepreneurial gender segregation across sectors.

JEL-codes: C93 G21 G32 J16 L25 L26 O16 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Discriminatory Lending: Evidence from Bankers in the Lab (2021)
Working Paper: Discriminatory Lending: Evidence from Bankers in the Lab (2020)
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DOI: 10.1257/app.20210180

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