Join Professor Manthos Delis of Montpellier Business School as he discusses the effect of credit constraints on income and it's impact on finance-inequality.
We study the effect of credit constraints on individuals’ income, using a unique data set of business loan applications to a single bank from individuals that are majority owners of small and medium-sized firms.
The credit score assigned by the bank creates a sharp discontinuity in the decision to originate the loan or not.
We show that a loan origination increases the recipients’ income five years onward by approximately 11% compared to denied applicants.
Our results are robust to the use of individuals’ wealth as the outcome variable and several other re-specifications, and have important implications for the finance-inequality nexus.
This is an open event, there is no need to book. Please feel free to join us with your colleagues, classmates and friends.
Manthos Delis is a Professor of Financial Economics and Banking at Montpellier Business School.
He has a PhD in 2007 from AUEB, Greece, an MSc from York University, Canada, and a BA (honors) from Western University, Canada.
He previously was at the University of Surrey (Professor, 2012-2017), Cass (SL, 2011-2012), and University of Ioannina (L, 2008-2011).
His research interests cover banking, corporate finance and governance, operations research, and economics of inequality.