Hometown Lending

Lim, Ivan; Nguyen, Duc Duy

doi:10.1017/s0022109020000769

Hometown Lending

Lim, Ivan; Nguyen, Duc Duy

Authors

Dr Ivan Lim ivan.lim@durham.ac.uk
Assistant Professor

Professor Louis Nguyen duc.d.nguyen@durham.ac.uk
Professor

Abstract

Banks open more branches and make more lending near their Chief Executive Officers’ (CEOs) childhood hometowns. The effects are stronger among informationally opaque borrowers and among CEOs who spend more time in their childhood hometowns. Furthermore, loans originated near CEOs’ hometowns contain more soft information and have lower ex-post default rates, implying that hometown loans are more informed. Hometown lending does not affect aggregate bank outcomes, suggesting that credit is being reallocated from regions located farther away to regions proximate to bank CEOs’ hometowns.

Citation

Lim, I., & Nguyen, D. D. (2021). Hometown Lending. Journal of Financial and Quantitative Analysis, 56(8), 2894-2933. https://doi.org/10.1017/s0022109020000769

Journal Article Type	Article
Acceptance Date	Jul 22, 2020
Publication Date	2021-12
Deposit Date	Sep 29, 2020
Publicly Available Date	Sep 29, 2020
Journal	Journal of Financial and Quantitative Analysis
Print ISSN	0022-1090
Electronic ISSN	1756-6916
Publisher	Cambridge University Press
Peer Reviewed	Peer Reviewed
Volume	56
Issue	8
Pages	2894-2933
DOI	https://doi.org/10.1017/s0022109020000769
Public URL	https://durham-repository.worktribe.com/output/1260821

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http://creativecommons.org/licenses/by-nc-nd/4.0/

Copyright Statement
This article has been accepted in Journal of Financial and Quantitative Analysis [https://doi.org/10.1017/S0022109020000769]. This version is published under a Creative Commons CC-BY-NC-ND. No commercial re-distribution or re-use allowed. Derivative works cannot be distributed. © copyright holder.