TY  - UNPD
A1  - Skrastins, Janis
A1  - Vig, Vikrant
T1  - How organizational hierarchy affects information production
T2  - Working paper series / Institute for Monetary and Financial Stability ; 92
N2  - This paper empirically investigates how organizational hierarchy affects the allocation of credit within a bank. Using an exogenous variation in organizational design, induced by a reorganization plan implemented in roughly 2,000 bank branches in India during 1999-2006, and employing a difference-in-differences research strategy, we find that increased hierarchization of a branch decreases its ability to produce "soft" information on loans, leads to increased standardization of loans and rationing of "soft information" loans. Furthermore, this loss of information brings about a reduction in performance on loans: delinquency rates and returns on similar loans are worse in more hierarchical branches. We also document how hierarchical structures perform better in environments that are characterized by a high degree of corruption, thus highlighting the benefits of hierarchical decision making in restraining rent seeking activities. Finally, we document a channel - managerial interference - through which hierarchy affects loan outcomes.
T3  - Working paper series / Institute for Monetary and Financial Stability - 92 
KW  - Hierarchies
KW  - Soft Information
KW  - Globalization
KW  - Complexity
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/37484
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-374847
UR  - http://www.imfs-frankfurt.de/fileadmin/user_upload/IMFS_WP/IMFS_WP_92.pdf
IS  - April 30, 2015
PB  - Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
CY  - Frankfurt am Main
ER  -