Description:

Narly Dwarkasing (Erasmus University)

Title: The Evolution and Economic impact of African American banks: The USA from 1900 to present. 

Abstract: This study presents new empirical findings on the long-term economic effects of African American owned banks. We collect data on nearly all African American Banks that have operated in the United States between 1900 and 2020. We examine the impact of African American Banks on various economic indicators for African Americans living in the same county, including Black home ownership rates. Additionally, we employ an instrumental variable approach based on Freedman Banks' branches to address endogeneity issues that may arise from the selection of African American banks into certain communities and geographical locations. Contrary to existing consensus, as suggested by Baradaran (2017), that African American Banks had no significant impact on economic outcomes for African Americans, the results of this study indicate that these banks did in fact stimulate Black home ownership rates, which is a primary indicator of wealth accumulation, in the counties where they were active.