As part of the series of the „Finance Research Seminar“, VGSF welcomes Claire Celerier from University of Toronto, Rotman School of Management to present her research paper.
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Paper
Finance, Advertising, and Race
Using a natural experiment from the US post-Emancipation era, this paper investigates the role of bank advertising in racial financial disparities. We exploit a regulatory change at the Freedman’s Savings Bank – the first bank collecting deposits from African Americans -, which facilitated the misuse of depositor funds. A difference-in-differences analysis shows an increase in advertising volume post deregulation, linked to a rise in deposit collection, as well as a shift in content towards racially targeted messaging and false claims. This intensified persuasive messaging coincides with the issuance of fraudulent loans, leading to substantial depositor losses.
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