Pedro Henrique Duca Amoni
Master's – The impact of judicial bias on credit market: Evidence for São Paulo
Advisor: Prof. Dr. Gabriel de Abreu Madeira
Comission: Profs. Drs. Rafael de Vasconcelos Xavier Ferreira, Sérgio Naruhiko Sakurai and Luciana Yeung Luk Tai
Class: 217, FEA-5
We exploit the random assignment of cases to judges to assess how banks react when facing magistrates who are more or less friendly to them. From the balance information of the four major commercial banks in Brazil we cross-referenced this data to the information of sentences issued by the State Justice of São Paulo whose these banks are defendants in the lawsuit. We constructed an instrumental variable using judicial decisions that considers all financial institutions - not just those observed in the final sample - to measure the level of leniency of each judge compared to other magistrates in the same jurisdiction. This paper finds evidences that support the idea that financial institutions reacts constraining the credit offer when observed a not favorable justice.
*Abstract provided by the author