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Lending in the Dark: Local Newspaper Closures and Discrimination in Mortgage Lending

Author

Listed:
  • Tran Huynh

    (Durham University)

Abstract

This paper examines the extent to which local newspaper closures affect discrimination against minority borrowers in mortgage lending. I Ä„nd that following a newspaper closure, interest rate differentials between minority (black or Hispanic) and comparable non-minority borrowers increase by 5.5 basis points, widening the existing gap in mortgage outcomes between the two groups. This effect cannot be explained by differences in credit risk or underlying economic conditions. My Ä„ndings suggest that the local press plays an important role in monitoring lending practices and reducing information asymmetries in the mortgage market.

Suggested Citation

  • Tran Huynh, 2025. "Lending in the Dark: Local Newspaper Closures and Discrimination in Mortgage Lending," Jena Economics Research Papers 2025-002, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2025-0002
    as

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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2025_002.pdf
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    References listed on IDEAS

    as
    1. Ho, Po-Hsin & Chen, Hung-Kun & Lin, Chih-Yung & Chi, Che-Wei, 2016. "Does monitoring by the media improve the performance of government banks?," Journal of Financial Stability, Elsevier, vol. 22(C), pages 76-87.
    2. Lily H. Fang & Joel Peress & Lu Zheng, 2014. "Does Media Coverage of Stocks Affect Mutual Funds' Trading and Performance?," The Review of Financial Studies, Society for Financial Studies, vol. 27(12), pages 3441-3466.
    3. Benjamin J. Keys & Amit Seru & Vikrant Vig, 2012. "Lender Screening and the Role of Securitization: Evidence from Prime and Subprime Mortgage Markets," The Review of Financial Studies, Society for Financial Studies, vol. 25(7), pages 2071-2108.
    4. Baker, Andrew C. & Larcker, David F. & Wang, Charles C.Y., 2022. "How much should we trust staggered difference-in-differences estimates?," Journal of Financial Economics, Elsevier, vol. 144(2), pages 370-395.
    5. Hanson, Andrew & Hawley, Zackary & Martin, Hal & Liu, Bo, 2016. "Discrimination in mortgage lending: Evidence from a correspondence experiment," Journal of Urban Economics, Elsevier, vol. 92(C), pages 48-65.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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