VGSF - WU Vienna - LC

Mrinal Mishra, Universität Zürich

Campus WU D4.0.144 12:00 - 13:30

Organizer WU Vienna

The Fin­ance Brown Bag Sem­inar is held by the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance (WU Vi­enna) and the Vi­enna Gradu­ate School of Fin­ance (VGSF). It serves as a present­a­tion plat­form for PhD stu­dents, fac­ulty mem­bers, and vis­it­ors. An over­view of BBS on the web­site of the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance.

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June 19th, 2019, 12:00-13:30, D4.0.144

Mrinal Mishra, Uni­versität Zürich

Title: "The ef­fect of con­flict on lend­ing: Em­pir­ical evid­ence from In­dian bor­der areas"

Ab­stract

We study the ef­fect of con­flict on loan of­ficers in areas bor­der­ing In­dia and Pakistan in the state of Jammu & Kash­mir in In­dia. We ob­serve that the loan terms bor­row­ers ob­tain in equi­lib­rium get pro­gress­ively worse after re­peated in­cid­ences of con­flict. This may be at­trib­uted to changes in be­liefs or changes in risk aver­sion on be­half of the branch ad­min­is­tra­tion. Our tests demon­strate that both factors, chan­ging risk pref­er­ences and be­liefs con­trib­ute to the fi­nal out­come. The lat­ter primar­ily mani­fests it­self through changes in ex­pec­ted fu­ture de­fault due to learn­ing about the en­vir­on­ment. Our res­ults are ex­pec­ted to in­form poli­cy­makers how lend­ing may evolve when faced with shocks em­an­at­ing from polit­ical and eco­nomic tur­moil.



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